fxmatters

• 29 July 1960 – Britain withdraws the farthing from circulation after 800 years because it isn’t worth a “farthing” anymore.
• 31 July 1914 – the New York Stock Exchange closes, along with others, as WWI unfolds, to open again after a record closing period on Dec 12th.
• August – EUR/JPY down 8 in last 10 years; AUD/CAD down in 9 of 10.

Every now and again we receive a shock to remind us just what risk really means. Now is one of those times in the markets. The adjustment is not yet over … Read Disentangling risk and return

The NZD/USD hit another 21-year high last week. The AUD/USD also reached its highest level since 1989. But the NZD/AUD was up a mere 0.2% in spite of the local talk of another RBNZ hike. What is driving the NZD? … Read Exploring some options for the next 6 months

• 26 July 1842 – Alfred Marshall, the economist to popularise supply and demand curves, is born.
• 27 July 1694 – The Bank of England is chartered an early loan was £1.2 million to the king at 8% p.a.
• 28 July 2003 – J.P. Morgan Chase and Citigroup agree to pay fines of about $300m to settle charges they knowingly helped Enron hide debt & inflate profits.

• 21 July 1816 – Paul Reuter was born as Israel Josaphat in Germany, later to change his name, go into telegraphy and expand into international news.
• 22 July 1923 – “I am amazed when I found today that one had to pay 24,000 marks for a ham sandwich whereas yesterday in the same cafe a ham sandwich cost only 14,000 marks”, said the Berlin correspondent for the London Daily Mail.

The RBNZ must decide next week whether or not to hike the cash rate again. One way or other it will cause an exchange rate reaction … Read Obstacles along the way

Exchange rates are the result of an interaction between decisions about how to structure one’s portfolio and decisions about trade, production and investment. Different perspectives offer different measures of the fair-value for the NZ dollar … Read Finding the correct exchange rate

• 10 July 1790 – Adam Smith, one week before his death, has colleagues burn 16 volumes of his work.
• 14 July 2006 – Bank of Japan hikes the cash rate to 0.5% p.a. and indicates further hikes will be gradual – that’s proved to be an understatement!

• 2 July 1997 – Thai baht devalued 20% and the IMF are asked to help—the start of the Asian crisis.
• 3 July 1944 – JM Keynes lays out the plan for the World Bank at the conference that also tied currencies to the US dollar.
• 7 July 1891 – American Express copyrights its Travelers Cheque and proceeded to sell 248 cheques in the first year.

The upward NZ dollar march continued last week. Watch for some volatility this week as the RBNZ possibly repeats its intervention in another holiday-interrupted week … Read The rubber band is pulled tighter