Currency talk: how the currency market reacted to the Paris terror attacks
Jason Walls and Westpac's Imre Speizer discuss the global currency market news on NBR Radio and on demand on MyNBR Radio.
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Although the “risky” currencies such as the kiwi and Aussie dollars rose slightly after the terror attacks in Paris on Saturday, they fell back down within a few hours.
Westpac senior market strategist Imre Speizer says the currency markets were not really hit too badly after the attacks.
“Of all the major asset classes, the currency markets reacted the least,” he says.
Most of the reaction was in the interest rate markets, where bond yields fell as the capital flight to safe haven occurred, he says.
As the attacks didn’t have a big reaction on the movement of goods and capital and did not affect French or European trade, the currency markets did not react strongly.
The kiwi/ euro cross rate remains relatively normal, trading at just over 60c.
The kiwi/$US has also been looking relatively flat at around 65c – Mr Speizer says in the near term it’s looking “very sticky.”
But he expects the kiwi to get to around 62c against the greenback by Christmas.
Mr Speizer expects the Reserve Bank to cut its interest rates in December, bringing them down to 2.5% and for the US Federal Reserve to hike its rates in December.
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Tue, 17 Nov 2015
Tue, 17 Nov 2015
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Currency talk: how the currency market reacted to the Paris terror attacks
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