The Pound touched its highest level against the New Zealand dollar since September 2010 this morning despite mounting concern that rising oil prices and poor retails sales numbers will push the UK economy back towards recession.
The cause is New Zealand’s deadliest earthquake in eight decades which analysts are forecasting may turn out to be the costliest natural disaster for insurers since 2008.
A USD $12 billion loss from this week’s earthquake would make it the seventh-most-costly natural disaster for insurers since 1970, according to the Insurance Information Institute.
Meanwhile, Moody’s Investors Service, a credit rating company advised that there is no immediate need to change the credit ratings of insurers because of the Christchurch earthquake but said ratings pressure may develop over time on the banking sector.
On economic fundamentals, if it weren’t for this week’s events, there is little doubt that with the threat of a ‘double dip’ recession in the UK harming the pound and rising commodity prices benefiting the NZD, the exchange rate would be heading towards the low levels since at the turn of the year.
Commentary by Tony Redondo
“Any opinions expressed in this document are those of TorFX analysts. Any analysis and/or forecasts provided are aimed at helping clients understand market conditions and developing trends. Clients are wholly responsible for their own trading decisions.”
