Friday 7th November 2008
|Text too small?|
Stocks fell in Europe and the U.S. after the International Monetary Fund predicted a recession in the U.S., Japan and the Euro region, the first simultaneous contraction of the major economies since WWII. Prices for oil and metals fell, Toyota halved its profit forecast and the Bank of England slashed its benchmark interest rate by 1.5 percentage points. The Dow Jones Industrial Average sank 4.6%
"The dollar is trading off the back of global equities," said Philip Borkin, economist at ANZ National Bank. "It's going to depend on how low the Dow goes."
The kiwi dollar fell to 59.14 U.S. cents from 59.92 cents yesterday, and dropped to 57.85 yen from 58.78 yen. Against the Australian dollar, it slipped to 87.86 cents from 88.14 cents.
Borkin said the kiwi may trade as low as 58.50 U.S. cents today.
Investor confidence has dimmed with the release of poor U.S. economic data, and "rather nasty" predictions are being made for American non-farm payroll numbers, Borkin said.
The number of people in the U.S. getting unemployment benefits has jumped to the highest level since 1983. Adding to the gloomy outlook, the IMF revised down its 2009 forecast for global growth to 2.2%.
Aggressive interest rate cuts by the Bank of England and the European Central Bank failed to quell concerns about a global recession.
In New Zealand, more weak data is expected next week with the quarterly retail trade survey likely to show its third contraction in a row.
Borkin said the currency could weaken if tomorrow's general election doesn't immediately show a clear winner.
Paul MacBeth, Businesswire.co.nz
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