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Kiwi Dollar Hits A Post-Float High
Thursday June 2nd 2011
The main event of interest with regard to the NZ economy this week was a rise in the NZD above 50 pence and to a post-float record against the greenback in response to a variety of factors. There was initially last week’s news about $6bn of Chinese investment in NZ, then a very strong report on export growth in April, further commodity price gains reported in May, and soaring business confidence as we reported over three weeks ago in our monthly survey.
This week I’ve been meeting people in both Ireland and London and the picture one receives is of two economies still struggling – one with a weak housing market, high unemployment, high government debt, fiscal restraint slowing growth, depressed consumer sentiment, banks unwilling to lend and many businesses unwilling to borrow – and the other place is Irish. The big differences lie in Ireland’s unemployment rate being twice the UK’s at about 15%, the extent of pullback in housing construction and remaining housing over-supply being phenomenally greater in Ireland than in the UK, and the fiscal impact of bank bailouts being much greater in the Emerald Isles.