Are there any FX traders on this forum? Since the recent Christchurch earthquake, the NZ dollar has taken a hammering against the AU dollar. It's dropped about five cents. I figure the chance of another major quake in Christchurch is reasonably high and that wouldn't do the NZ dollar any favours, so want to diversify my savings a bit. My savings are currently split 48% in precious metals and 52% in cash (NZ dollar). I'm thinking about putting some of that cash into a foreign currency account (AU dollar) or buying more gold. I should probably mention that if there is another major quake in Christchurch, I plan on permanently relocating to Australia. Are there any obvious reasons why the NZ dollar might rise from its current 20 year low against the AU dollar? What would you more knowledgeable folk do?
I woudn't call myself a trader, but I have at times bought up certain currencies to diversify long-term. Was big on USD and especially EUR back in the day, but have sold all out of both and into AUD/PMs for obvious reasons (USD to PMs due to PMs being sold in USD) When the NZD dropped during the earthquake I quickly bought in (almost at the 20 year low vs the AUD). Interestingly enough, I actually plan to travel to NZ and open a bank account there to deposit the funds. May as well make interest on the side, even if the RBNZ recently lowered the interest rates. But anyway, I jumped into it thinking that from a 20 year low, it can't get much worse. The housing market there has already gone through a rough patch recently, and while it may get worse, it seems caution is being exercised. From here on NZ should be on a slow and long road to recovery even if another earthquake happens in Christchruch. I am mainly banking on what should be commonsense: That the rebuild is actioned with proper earthquake resistance in mind. In the meantime Australia's housing market is just beginning to head south. The over-reliance of the mining sector and lack of budget control here is really putting Australia on thin ice. Some companies seem to list publicly only to ride the boom despite having no actual production capacity. It may be that the AUD weakens due to the above rather than the NZD strengthens against the AUD. The recent events in Japan have added to my beliefs of a long-term New Zealand recovery. I have seen a few more seafood products made in New Zealand at local shops and seen some asian seafood products removed. I take it as a sign that agricultural exports will improve for NZ. I won't say I'm more knowledgble, or prop myself up in any kind of way in that regard, but I'll give my 2 ounces worth.... IF I were in NZ in the same position, I would probably split the cash into 50% high dividend yield stocks such as Ebos Group (EBO) YLD 9.78% and The Warehouse Group (WBS) YLD 12.01%. The other 50% would go into an on-call account. The interest generated would be deposited into a "save to win" type account with a favourable rate such as ANZ Serious Saver. Would withdraw from the on-call account when massive dips show up on PMs and reserve those PMs as a "moving to Australia stack". That way I would feel more comfortable if and when the time came to sell for AUD since the stack was put aside for that purpose. I would keep my income generating stocks depositing to my on-call accounts as a back-up regardless of my location. I'm a low-risk, long-term, hold-during-tree-shaking type. DYOR
Thanks for your reply. That's pretty much what I've decided, except for the buying shares bit I'm going to buy more PMs and then if the need arises I can sell them for aussie dollars. PMs rising in value (value, not necessarily price) is a sure thing. Taking a risk on the NZD/AUD rate is more akin to gambling.
