Is One Kiwi Dollar about to be worth more than one Aussie?

We may have recently beaten the Kiwis (flogged them actually) in the Cricket World Cup Final but it’s the Kiwis who are winning the currency price race with one Kiwi Dollar now being worth the same as one Aussie Dollar.

This is the first time since June 1995 the AUDNZD has been this low.  It reached 1.0275 in June 1995 and since then has averaged around 1.2500 with a high of 1.3791 in March 2011. So why is the AUD dropping so far against the Kiwi Dollar? The answer is because the official cash rate at the RBNZ is 3.5% and the official cash rate at the RBA is 2.25% making a 1.25% interest rate differential between the two Central Banks. Graham Wheeler the RBNZ Governor won’t like the Kiwi overtaking the Aussie Dollar in value because it simply makes New Zealand less competitive on an international trade basis and with Australia being such an important export and tourism partner a high Kiwi Dollar is just not good for the Kiwi economy.

I am not sure too many Aussie’s will be able to bring themselves to go to New Zealand now $1 AUD ends up being worth less when they exchange it into Kiwi Dollars. Of course its great for Australian tourism and if you are worried about an influx of more Kiwis’ coming across the Tasman to live in Australia you should be. They are coming in droves now! 

650,000 Kiwi Citizens now live in Australia and the migration out of NZ to Australia has increased 40% in the last 10 years and is increasing every year. 650,000 Kiwis living in Australia is 12% of the NZ population. In comparison only 70,000 Aussies live in NZ, which is 0.03% of the Australian population.  With the AUDNZD now at parity and soon likely to be even lower the Government in New Zealand might just have to shut the exit door.

LTG GoldRock RBA Monthly update

The minutes from the RBA monthly March meeting were released yesterday with the Central Bank of Australia not discounting another rate cut choosing to conclude their statement with the following comments. “In considering whether or not to reduce the cash rate further at this meeting, members saw benefit in allowing some time for the structure of interest rates and the economy to adjust to the earlier change. They also saw advantages in receiving more data to indicate whether or not the economy was on the previously forecast path. Further, they noted the greater degree of uncertainty about the behaviour of borrowers and savers in a world of very low interest rates.

Taking account of all these factors, members judged it appropriate to hold the cash rate steady for the time being, while recognising that further easing over the period ahead may be appropriate to foster sustainable growth in demand while maintaining inflation consistent with the target.”

LTG GoldRock last night held Part 2 of their special Free Forex Coaching Sessions. You can review the recording here.

North Korean cyber-attack tensions are unlikely to rattle markets.

The tensions between the US and North Korea over the recent cyber-attack on Sony Pictures is unlikely to rattle financial markets unless it escalates into something far more sinister.

The US blames North Korea for the Sony hacking scandal and on Monday North Korea’s entire internet access was switched off and the country was without the worldwide web. The USA has 152,000 internet access service points, North Korea has just 4. Obama said the US would retaliate at a time that suited them and with an appropriate punishment that fitted the crime. Was it the US Government who shut down North Korea’s internet access on Monday? The US won’t admit to doing it but unless it was a group of private hackers playing games with North Korea one would have to assume the US Government had something to do with it.

Don’t be side tracked with financial entertainment and focus on the big picture fundamental trends which are set in place by Central Banks.

LTG GoldRock Insider Report Extract: Tuesday 23rd December 2014

China and the Greeks spark market sell off.

It wasn’t just one thing it was a number of things that sparked the sell off on stocks and drove the Yen off its lows. Tuesday was a great example of traders buying the Yen in times of stock market uncertainty.




Chinese stocks went down 5% which is the equivalent of the Dow Jones being down 900 points (a big down day on the Dow Jones is about 150) and Greek stock markets dropped over 12.7% which is the biggest single decline in 27 years.

The Greek government has called an election a couple of years early and overall Europe has a big struggle on its hands and countries such as Greece, Spain and Italy will cause more grief over coming months and years for the European Central Bank.

The full LTG GoldRock Review of this Forex News can be found in the GoldRock Insider Report for Wednesday 10th December 2014
 

LTG GoldRock: Everyone is worried about time.

The biggest worry people have as they get older is, Will I die poor?
We are all living longer and longer but the traditional ways of making money are getting harder and harder. Bull! They are the same as they always have been. If you do what everyone else is doing you will run out of money when you are old. That has never been any different for the last 1000 years so let’s stop with this crap about its harder today than it was back in the old days.

The best investors in the world, Paul Tudor Jones, Warren Buffett, Stanley Druckenmiller, George Soros return on average between 20% and 40% per annum and generally speaking closer to 20% than 40%. But they do it year after year and they started out small, every one of them and they compounded their money and learnt how to beat the average. Beating average is all you have to do and to beat average is not difficult, you just need patience and discipline.

Did you know that $100,000 at a 25% return on investment per year, compounded over 15 years is $2,842,171? $50,000 compounded over the same time frame at the same return is $1,421,085.

Most people look at those numbers and say the following to themselves subconsciously and sometimes out loud. "I cannot relate to those numbers and I cannot see myself earning that sort of money, and besides I don't have the time."

If you find yourself thinking that way let’s just do this. Don't do anything, keep doing what you are doing, pass the time that you have left just being average and you are destined to bring to reality your biggest fear. Running out of money before you die.

But it’s not the running out of money bit that we are really all afraid of. It's the experiences that we dream about that one day we want to fulfil because all our lives we've been busting our asses trying to get to a stage where we can enjoy them. But in reality if most people just continue to do what they are doing they are destined to die with those experiences still only a dream and never fulfilled.

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