Thursday, July 31, 2008
According to a survey conducted by Westpac to 1,556 consumers on their personal finances, consumer confidence fell to the lowest level since the 1991, adding to evidence that the economy is already in recession.
New Zealand‘s economy could be on the brink of recession. We target the NZD/USD at 0.70 in three months and at 0.65 before the end of the year.
The New Zealand dollar has been falling sharply against the world’s most heavily traded currencies on speculation that the Reserve Bank of New Zealand would have to cut interest rates faster than traders had previously expected. Indeed, the rapid deterioration of the New Zealand economy prompted many investors to exit the so called carry trades despite New Zealand’s high level of interest rate. Yet, the current wave of risk aversion in the world’s financial markets which forced many investors to cut holdings of higher yielding currencies has not been the only factor putting downward pressure on the value of the New Zealand dollar. In fact,