Thursday, December 08, 2005


Kiwi 'Accident' Finally Happens

The Financial Times reports that fundamentals are becoming a factor in the New Zealand currency market. "The New Zealand dollar came crashing back to earth on Wednesday after soaring to 20-year highs in trade-weighted terms this week. In reality, the kiwi has long been heading for a fall. Many commentators have long viewed the currency as overvalued."

"'People are starting to think it is time to start edging their way towards the exit, because when people start to rush, the kiwi door is very narrow,' said Geoff Kendrick, currency strategist at Westpac."

"Kris Bernie, dollar bloc analyst at National Australia Bank, said: 'Those who were hanging on for further rate rises may have got spooked. This was an accident waiting to happen.'"

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