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Hi All,

As promised here’s a brief update on what’s been happening with the NZ Dollar over the last week.

NBNZ Business Confidence eased for a second straight month in November but held near decade highs as firms remained generally upbeat about future prospects for international and domestic growth. The Business Outlook showed strengthening positive sentiment among business managers that their own company activity will improve over the next 12 months.

With inflation expectations remaining subdued (+2.61% from 2.60%) there is little pressure on the RBNZ for a pre-emptive hike in official rates and to diverge from their stated course of holding rates at record lows until 2010. October Trade figures released last week showed the annual deficit fell to its lowest level in 7 years as the value of imports declined more sharply than that of exports. Low levels of imports indicate that business and retail consumers remain cautious, despite improving sentiment, to commit to spending even with an attractively high NZD exchange rate.

The big market mover in the week was the announcement by Dubai that it was suspending bond repayments with a view to restructuring the debt. Abu Dhabi, the richest and more conservative member of the emirate states, went some way to calming market jitters by announcing it would selectively support its neighbour. However, the Dubai bond repayment suspension hit the currency market hard and further moves are set to continue in what are looking like increasingly thin year-end trading markets.

GBP/NZD Movement – High’s & Low’s of last week (23/11/09 – 27/11/09)

High’s: 2.3299
Low’s: 2.2570

A movement of: 3.23%.

Difference on £200k

High: $465,980
Low: $451,400

Difference of: $14,580

Whilst FX isn't the most thrilling of subjects, the sooner you begin to think about your money transfers, the more likely you are to make your money go further.

A further update will be added next week.


Jon Sermon
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