BNZ Weekly Overview

An overview of the economy in language you can understand

Tony AlexanderLearn more about the housing market, interest rates, and foreign economies in Tony Alexander's Weekly Overview - designed to help Kiwi businesspeople and householders make informed financial decisions.

In this week's issue

Thursday 17 May 2012

Apart from Germany surprising with 0.5% growth during the March quarter there is very little positive news coming out of Europe and it seems just a matter of time and another general election in a few weeks before the Greeks leave the Euro and go back to the drachma. 

There are no rules for doing this and deepening concerns about the impact on holders of Euro-denominated debt in Greece, questions about whether other indebted countries may follow, and uncertainty about how much tolerance the Germans have to easing off fiscal austerity mean investors are increasingly voting with their feet and leaving the Euro. 

This is supporting the Pound, Yen and greenback, but adding to weakness in the NZ and Australian currencies which tend always to fall when bouts of the heeby geebies grip world markets.