New Zealand Dollar?

I was wondering if any of you think it’s a good time to invest in the Kiwi.

Just a few weeks ago it was trading around .75 to the Greenback but now it’s down to .685.

I understand that the Kiwi was overvalued before but now with the drop and New Zealand’s high interest rates (above 7%) it seems like a good investment.

Or am I wrong?

If I had the money to spare… I’d buy some Kiwi.

NZ economy is still looking strong so prospects of further rate rises are good, so more gains in NZD.

Also, with NZD being 90% correlated to AUD, need to look at AUD too.

Australia’s economy is performing very well. In the middle of the recent crisis, many companies were reported very healthy profit figures and will most likely not be affected much by the sub-prime problems in the US. Inflation is still the dominant risk according to the Reserve Bank. Unemployment is low. So again, prospects of more rate rises. Therefore… increase in AUD is likely… and so will the Kiwi.

3 weeks ago, NZ central bank sold NZ dollars to interrupt forex. Free market maybe the past. B4 Investing NZD, you should understand NZ central bank’s policy.

That’s why I’m posting and asking. But your post doesn’t enlighten me much on the situation.

Yes… RBZ did enter the market a few weeks ago.

But they had almost no effect on the general trend. The NZD just kept on going up until the recent drop which had nothing to do with central bank intervention.

RBA and RBZ are not generally ones to enter the market unlike PRC or ROC which do so almost on a daily basis.

It was building nicely till a 12% drop in the last three weeks. But we still get good interest rates on NZ cash holdings: highest in the developed world (and I would not invest cash elsewhere).

It’ll bounce back, just like the Aussie will. they both suffered a lot in the last weeks not from any particular strong connection to the sub-prime debacle but as they were the first currencies to be affected by people slowing the flight of carry cash: taking a loan in Japan at near zero rates and investing in NZ banks.

fundamentally they are still strong, with good trading bases and strong commodity prices, and they’ll both recover and improve in two months relative to the Taiwan peso.

I buy NZD only because I have to (Mortgage in NZ).

My view (uneducated) reading bits and pieces is that the kiwi will go sub 60c USD in the next week or two. There is talk of interest rates going up even more than present levels, but if the sub 60 prediction is correct it’s worth waiting a bit longer as from today, that would be a 10% drop +, which would negate any gains in interest.

The NZ housing market has been booming (20% increase year on year) for about 5 years now and some say there is a major correction coming. I’m not sure how this will affect the NZD.

more like around 20% (82->66 with a rebound to 68)

Thursday was the biggest single day drop in 22 years.

ouch. didn’t keep up over the weekend.

Oh well, at least i can spend them in NZ.

edit: i just looked, and the month high was 26.5, the month low was 22.2, that makes a 16% slide. I bet you’re talking againt the US dollar, while i’m playing against the Taiwan peso here.

i would certainly be steering clear of the USA dollar about now.