Back
5 Aug 2013
Flash: NZD/USD faces headwinds on economic concerns – BNZ
FXstreet.com (New York) - The recent issue regarding export contamination is clearly negative for the NZ economy – just how much is very difficult to gauge, suggests the BNZ Research Team.
Key quotes
“The impact will depend on the response from Fonterra, authorities and other interested parties. However, in principal, the real economy impact should be short lived.”
“Perhaps, more importantly, the events of the past few days are a stark reminder of New Zealand’s increasing vulnerability to a single product and to a single export destination.”
“We are not changing our economic forecasts at this point, although we will stay put on the upgrade to our economic growth forecasts we were considering until the dust settles. We are not changing our interest rate forecasts either.”
“The fallout from the contamination issue is a very important one to monitor going forward. Any lingering major concern about the quality of NZ’s food production could have far reaching economic implications, given food’s large share of the nation’s exports. By the same token, it is worth noting that the DCD-residue issue back in January receded relatively quickly. There is a chance that this does the same.”
Key quotes
“The impact will depend on the response from Fonterra, authorities and other interested parties. However, in principal, the real economy impact should be short lived.”
“Perhaps, more importantly, the events of the past few days are a stark reminder of New Zealand’s increasing vulnerability to a single product and to a single export destination.”
“We are not changing our economic forecasts at this point, although we will stay put on the upgrade to our economic growth forecasts we were considering until the dust settles. We are not changing our interest rate forecasts either.”
“The fallout from the contamination issue is a very important one to monitor going forward. Any lingering major concern about the quality of NZ’s food production could have far reaching economic implications, given food’s large share of the nation’s exports. By the same token, it is worth noting that the DCD-residue issue back in January receded relatively quickly. There is a chance that this does the same.”