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New Zealand Dollar Forecast brought to you by TransGlobal payment solutions…
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The Marketplace - NZD Overview
Source: Reuters (42 Analysts Polled)
Forecasts 1 - Month 3 - Months 6 - Months 12 - Months
GBP/NZD 2.5960 2.5510 2.6580 2.7565
NZD/GBP 0.3852 0.3920 0.3762 0.3628
NZD/USD 0.5300 0.5425 0.5600 0.5800
Still hurting but things are improving
New Zealand will emerge from its worst recession in more than three decades in the fourth quarter this year led by an increase in business confidence, the Treasury Department said this week. The economy will probably contract for aseventh straight quarter in the three months to Sept. 30. The economy shrank 0.9 percent in the fourth quarter of 2008.
New Zealand businesses became optimistic for the first time in eight months in May as a drop in borrowing costs buoyed the outlook for profit and hiring, according to a survey by ANZ National Bank Ltd. “This recovery supports our view that gross domestic product will return to growth later in 2009,” the Wellington-based Treasury said. Still, “more confidence readings are needed to confirm this turnaround.”
As the economy starts growing, the labor market will remain weak and unemployment will continue to rise. In last month’s budget, the government said the jobless rate will rise to 8 percent next year from 5 percent in the first quarter of 2008.
Buoying the economy, fewer people are leaving New Zealand and more are returning home as jobs are harder to get overseas. Net permanent migration is rising faster than forecast which may buoy the housing market
New Zealand’s House Prices Fall 8.1% (May) From Year Earlier
New Zealand house prices fell in May at the slowest pace this year, signaling the housing market may soon pick up and help the economy recover from a recession. Average prices dropped 8.1 percent from a year earlier, Quotable Value New Zealand Ltd., the government valuation agency, said in a report. The annual decline is the smallest since December.
House sales and home-building approvals are rising as consumer confidence in the housing market improves. The wider market is moving toward some form of equilibrium. The recent buoyant activity has been fueled by people taking advantage of lower mortgage rates. More consumers are inspecting properties and making offers. A lack of new listings is helping to underpin prices.
Quantitative easing, “an imperfect tool”
New Zealand central bank Governor Alan Bollard says tools such as quantitative easing are imperfect and he doesn’t want to use them! “If we felt we’d got to the stage where we though monetary policy wasn’t having its normal orthodox impact, we have prepared to do other things,” Bollard told news agency Scoop. “I should say I’m not expecting to have to use them. Because we see them as imperfect tools, I’m hoping we never will.”
“We don’t think that we have necessarily reached the bottom of traditional monetary policy,” Bollard said. “Monetary policy is designed to give stimulus. We’ve still got to see some of that happening.” Bollard cut the official cash rate to a record 2.5 percent in April and said he was prepared to cut borrowing costs further. There is a bit of a debate as to what he will do this week, some say no move but other analysts are predicting a 0.25% cut.
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