The Predictive Power of the Kiwi


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Question: What do currencies say about an economy? Well that’s a trick question because the answer is everything and nothing at all

See, in today’s trading markets a currency means nothing unless it’s compared against another national currency (or perhaps the price of gold). When you compare a currency against another currency, not only can it be a potential indicator of economic strength relative to other economies, but it can also tell you the general global financial mood, the appetite for risk, the stage of economic cycle – both domestic and global, about the state of inflationary pressures and about other macroeconomic and environmental forces.