Top Scoops

Book Reviews | Gordon Campbell | Scoop News | Wellington Scoop | Community Scoop | Search


NZ dollar may rise on hopes of U.S. auto bail out

NZ dollar may rise on hopes for bail out of U.S. auto industry

By Paul McBeth

Dec. 15 – The New Zealand dollar may rise on optimism the U.S. will find a way to bail out the auto industry, helping prevent the collapse of companies like General Motors which would lead to widespread job losses and may deepen the global economic slump.

The Bush Administration is considering tapping its ‘TARP’ bank bailout fund to finance a rescue package for automakers. New York University Professor Nouriel Roubini told Bloomberg television that a bankruptcy filing by General Motors Corp. or Chrysler LLC would extend the economic slump that’s already so severe that “there’s not going to be a recovery of growth until 2010.” Prices for oil and copper fell after the U.S. Senate failed to pass the automakers’ rescue package last week, putting pressure on currencies like the New Zealand and Australian dollars that rely on exporting.

“Commodity currencies shouldn’t fare too badly, provided the automakers deal goes through,” said Imre Speizer, currency strategist at Westpac Banking Corp. “There’s a smidgeon less risk aversion.”

The kiwi rose to 54.56 U.S. cents from 54.51 cents on Friday, and was up to 49.87 yen from 49.25 yen. It fell to 82.23 Australian cents from 83.34 cents on Friday, and was down to 40.84 euro cents from 41.02 cents.

Speizer said the kiwi may trade “at the top of a tight range” between 54.20 U.S. cents and 54.80 cents today as traders await the start of stock trading in the U.S. this week.

Traders are also awaiting the release today of the Economic Survey of Manufacturing for the September quarter, which may help sharpen forecasts for the pace of the economy in the latest three months. Third-quarter GDP is due to be released next week.

Rio Tinto Group, the world’s third-largest mining company, is reportedly drawing up contingency plans to raise capital that would allow it to take part in future industry consolidation. Last week it announced 14,000 redundancies to help reduce its debt by US$10 billion as demand for metals wanes. Workers at New Zealand’s aluminium smelter in Invercargill will have to wait until next year to find out if their jobs are safe.

In other signs that governments are moving to shore up weakening economies, China will increase its money supply by 17% next year to boost domestic consumption after November trade figures out last week showed imports plummeted 17.9% and exports declined 2.2%, their first fall in seven years.



© Scoop Media

Top Scoops Headlines


Reese Erlich: Foreign Correspondent: Trump Plays Both Sides Against The Middle

Is he a hawk? Is he a peacenik? The President keeps us guessing . By Reese Erlich President Donald Trump has convinced Republican isolationists and hawks that he supports their views. That’s a neat trick, since the two groups hold opposing positions. ... More>>

Binoy Kampmark: Waiting For The Old Bailey: Julian Assange And Britain’s Judicial Establishment

On September 7, Julian Assange will be facing another round of gruelling extradition proceedings, in the Old Bailey, part of a process that has become a form of gradual state-sanctioned torture. The US Department of Justice hungers for their man. The More>>

Gordon Campbell: On The Sorry Plight Of The International Education Sector

Tourism and international education have been two of the sectors hardest hit by the pandemic. They’re both key export industries. Yet the government response to them has been strikingly different. There has been nothing beyond a few words of ministerial condolence and a $51.6 million package (details below) to get the sector through the pandemic...

Binoy Kampmark: Google’s Open Letter: Fighting Australia’s News Media Bargaining Code

Tech giants tend to cast thin veils over threats regarding government regulations. They are also particularly concerned by those more public spirited ones, the sort supposedly made for the broader interest. Google has given us an example of this ... More>>

Gordon Campbell: On Trump’s Current Chances Of Re-Election

By now it seems clear that National have no fresh ideas to offer for how New Zealand could avoid the Covid-19 economic crisis. As in the past, National has set an arbitrary 30% ratio of government debt to GDP that it aims to achieve “in a decade or so,” ... More>>

The Conversation: Rogue Poll Or Not, All The Signs Point To A Tectonic Shift In New Zealand Politics

Richard Shaw AAP(various)/NZ Greens (CC-BY-SA)/The Conversation Strong team. More jobs. Better economy. So say the National Party’s campaign hoardings. Only thing is, last Sunday’s Newshub-Reid Research poll – which had support for the Labour ... More>>

The Coronavirus Republic: Three Million Infections And Rising

The United States is famed for doing things, not to scale, but off it. Size is the be-all and end-all, and the coronavirus is now doing its bit to assure that the country remains unrivalled in the charts of infection . In time, other unfortunates may well ... More>>

Binoy Kampmark: Altars Of Hypocrisy: George Floyd, Protest And Black Face

Be wary what you protest about. The modern moral constabulary are out, and they are assisted by their Silicon Valley friends in the Social Media club. Should you dare take a stand on anything, especially in a dramatic way, you will be found out ... More>>