BNZ Weekly Overview – 8 July 2004
BNZ WEEKLY OVERVIEW
The key points of this week's publication include the following.
Outlook For The NZD
The NZD is likely to be below its long term average of US 56 cents in two years time and may start a move toward that rate before the end of the year. However for the moment the pressure on the NZD is all upward as we have been highlighting in recent weeks and with the weak US labour market data on Friday calming interest rate forecasts across the Pacific the only barrier in recent weeks to a higher NZD has been removed. Exporters must take care to avoid over-hedging if the NZD goes back to 68 cents and we see a repeat of forecasts from earlier this year of rates substantially over 70 cents.
Housing Market Easing
Data from Barfoot & Thompson show further cooling of the Auckland housing market – though this is nowhere near as interesting this cycle as it was in the last one given the way in which Auckland has at best matched the average housing upturn over the past three years.
Retailing Activity Is Strong
Our monthly BNZ.MarketView report shows strong growth in retail activity over June and contact with the retailing sector shows in the short term prospects for continued growth look good. But the underlying fundamentals are slowly eating away at the foundations of above average retail spending growth and before the end of the year a potentially sharp pullback in retail spending growth may start.
The Weekly Overview is freely available to all BNZ staff, customers. Sections of the WO may be reproduced by anyone other than mortgage brokers provided the BNZ is noted as the source.