Importers more optimistic than exporters in latest ASB Barometer
(14 March 2013 – New Zealand) The latest ASB Institutional Kiwi Dollar Barometer has indicated businesses expect the Kiwi dollar to peak against the United States dollar at NZ$0.86 in June before easing.
The Barometer, tracks exporters’, and importers’ and importer/exporters’ exposures to foreign exchange risk, through surveying businesses with annual turnover of at least NZ$1 million (A$800 million).
The research, conducted by East & Partners, also surveys businesses’ expectations for the NZD/USD and businesses’ hedging plans for managing foreign exchange risk, as well as special questions on topical issues in the FX markets.
This quarter the interest was focused in how the strength in the NZD/USD has affected business decisions in regards to pricing, hiring and investment.
There was a clear divergence between importers and exporters, with importers noting they were more likely to increase pricing, hiring and investment; while exporters reported lower pricing, hiring and investment intentions in response to the high Kiwi dollar.
The effects of the high NZD in raising the hiring and investment intentions of importers are intuitive. However, the increase in pricing intentions indicated by importers in response to the high NZD is at odds with retail trade and inflation data showing a decline in the price of imported household goods in the face of the high NZD over the past year.
Businesses expect the NZD to peak soon, The Barometer indicates businesses expect the NZD/USD to peak in June this year. While importers continue to have higher expectations for the NZD, relative to exporters, the divergence in expectations between importers and exporters has reduced since the previous quarter.
Importers, on average, expect the NZD/USD to peak at 0.872 in June this year, before easing steadily over the year to reach 0.837 by March next year.
While exporters also expect the NZD/USD to peak in June, this is expected to be at a slightly lower level of 0.864. From there, exporters expect the NZD/USD will steadily decline over the year to reach 0.821 by March next year.
The research, conducted by East & Partners, also surveys businesses’ expectations for the NZD/USD and businesses’ hedging plans for managing foreign exchange risk, as well as special questions on topical issues in the FX markets.
This quarter the interest was focused in how the strength in the NZD/USD has affected business decisions in regards to pricing, hiring and investment.
There was a clear divergence between importers and exporters, with importers noting they were more likely to increase pricing, hiring and investment; while exporters reported lower pricing, hiring and investment intentions in response to the high Kiwi dollar.
The effects of the high NZD in raising the hiring and investment intentions of importers are intuitive. However, the increase in pricing intentions indicated by importers in response to the high NZD is at odds with retail trade and inflation data showing a decline in the price of imported household goods in the face of the high NZD over the past year.
Businesses expect the NZD to peak soon, The Barometer indicates businesses expect the NZD/USD to peak in June this year. While importers continue to have higher expectations for the NZD, relative to exporters, the divergence in expectations between importers and exporters has reduced since the previous quarter.
Importers, on average, expect the NZD/USD to peak at 0.872 in June this year, before easing steadily over the year to reach 0.837 by March next year.
While exporters also expect the NZD/USD to peak in June, this is expected to be at a slightly lower level of 0.864. From there, exporters expect the NZD/USD will steadily decline over the year to reach 0.821 by March next year.
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