By Paul McBeth
Friday 24th October 2008
|Text too small?|
Standard & Poor’s lowered Russia’s credit rating outlook due to the rising costs of its banking rescue package, while Argentina has taken emergency measures to stabilise its economy by nationalising its pension assets to repay debt. The Bank of New Zealand’s risk appetite index dropped to its lowest level since October 2002.
“Risk aversion and worries about a global recession remained the order of the day,” said Danica Hampton, currency strategist at the Bank of New Zealand. “These flows are expected to continue benefiting the US dollar and yen over the coming months.”
The kiwi fell as low as 55.66 yen, and recently traded at 56.07, down from 57.93. It dropped to 58.13 US cents from 59.21 yesterday, falling as low as 57.96 cents. The US dollar fell to 96.32 yen from 97.74.
The yen strengthened against other major currencies, reaching 123.43, its highest level against the euro since December 2002. Barclays Capital said in a research note that the yen may rise to 90 per US dollar by March 2009 as investors dump their higher-yielding assets funded in Japan and repatriate their cash.
Yesterday, the Reserve Bank of New Zealand announced a 100 basis point cut of the official cash rate to 6.5%. The New Zealand dollar bounced on the bank’s statement before continuing its downward trend.
The downward trend for the New Zealand dollar is “quite well developed,” said Khoon Goh, senior markets economist at ANZ National Bank. In today’s trading, he expects it to range between 57.80 and 59.80 US cents, and 55.20 and 59.40 yen.
No comments yet
28th October 2021 Morning Report
Wellington Drive Technologies Limited (NZX: WDT) Performs Strongly in Q3-2021
Ryman Healthcare Limited (NZX: RYM) Acquires Extensions to Two Existing Victorian Sites
Promisia Healthcare Limited (NZX: PHL) Banking Covenant Update
Pictor Limited Announces Start of US Clinical Trials for SARS-CoV-2 Serology Test
Arvida Group Limited (NZX: ARV) Opening of Rights Offer
Move Logistics Group Limited (NZX: MOV) Announces $40m Capital Raise
27th October 2021 Morning Report
The a2 Milk Company Limited (NZX: ATM) Investor Day 2021
Contact Energy Limited (NZX: CEN) Considers Green Capital Bond Offer