October 18 Edition Of The BNZ Weekly Overview

October 18 Edition Of The BNZ Weekly Overview

This week we have seen the release of data showing an improvement in consumer confidence in the past month in spite of the global liquidity crisis and continuing failure of finance companies. We have also seen expectations for growth in our main trading partners remain at firm levels. The Kiwi dollar has had a very volatile week trading almost as high as 78 US cents before falling almost below 74 US cents and ending just over 75 cents. This volatility is likely to continue in coming months. Wholesale interest rates have crept slightly lower in response to a better than expected September quarter inflation numbers for New Zealand but with petrol prices rising further inflation worries remain high and scope for any Reserve Bank easing remains very small if not zero in the coming year.

See attached file:
http://img.scoop.co.nz/media/pdfs/0710/WOOct18.pdf

Tony Alexander
Chief Economist
Bank of New Zealand

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