Talk Money with Tony Field – July 20, 2015

Warren Buffett (AAP)
Warren Buffett (AAP)

The New Zealand dollar has fallen sharply lately to levels not seen since 2009. It could fall even further this week, with the Reserve Bank set to review the official cash rate (OCR) on Thursday.

The kiwi fell 3 percent last week against the US dollar and is down 26 percent from its 12-month high.

It fell 3.4 percent against the pound and is down 19.6 percent from its 12-month high.

The kiwi lost 2 percent against last week against the Australian dollar and is down 11.4 percent from its 12-month high.

It was flat against the euro last week, but has fallen 16.4 percent from its 12-month high.

Last week's fall in the kiwi's value was prompted by a disappointing global dairy auction and weaker-than-expected inflation figures. Those two factors prompted investors to sell the kiwi because they think the chances have increased of another cut to the OCR.

Economists increasingly think the Reserve Bank might cut the OCR from 3.25 percent to as low as 2.5 percent by the end of the year.

Westpac chief economist Dominick Stephens believes the RBNZ will go even further, cutting the OCR to 2 percent by the end of the year.

The kiwi was trading at 65.20 US cents at 8am. It was 88.38 Australian, 41.79 pence and 60.17 euro.

Prime Minister John Key has returned from his break keen to downplay the growing concerns about the economy. But he did admit in an interview with Paul Henry that he does have concerns, specifically he worries about "the things we can't control."

"I can't control what happens in China or international dairy prices."

But he told Paul Henry that overall New Zealand's economic fundamentals are sound, with dairy accounting for only 5 percent of the economy.

"It hurts if you are a dairy farmer and we have lots of sympathy for them, but overall our economy is much more balanced than you would think."

He said the falling dollar would make a huge difference to exporters.

Mr Key also said that the Government is open to new restrictions on overseas property investors, if it decides it is needed.

From October non-resident buyers will have to provide information including an IRD number, a tax identification number from their own country and current identification.

Although the Prime Minister won't rule out the idea of restrictions on foreign buyers he does not seem enthusiastic. He pointed to the example of Australia.

"Australia has a policy theoretically of saying you can only buy a property in Australia if it is new. Then they have all of these caveats, it has not worked and it has not stopped prices going up."

Here is Paul Henry's interview with John Key.

The tech-heavy Nasdaq finished last week at a new record high.

It was helped by a surge in Google, following a better-than-expected earnings result.

Google 's class A stock leapt 16 percent at one point to above US$700 a share. Collectively the class A and C shares gained US$65 billion in value.

Google's surge was the single best one-day performance by any stock in the history of the S&P500.

The Nasdaq gained 4.25 percent for the week. The Dow Jones industrial average gained 1.84 percent for the week and the S&P 500 rose 2.41 percent.

Greece's banks will reopen this week, after the eurozone leaders agreed on the broad terms of a new bailout deal.

The details are still being worked out and at some point it seems inevitable that the crisis will flare up again.

Germany is adamant that the eurozone will not write off part of Greece's debt to international creditors, even though many economists say the debts are simply too high for the nation to ever be able to repay them.

But for now investors are happy, and the European markets gained around four percent last week.

Billionaire investor Warren Buffett is 84 years old and is still going strong, overseeing a huge range of investments owned by the holding company Berkshire Hathaway.

He often speaks to graduating classes and young people and offers them advice on how to be successful and happy. has compiled some of Buffet's tips: reports that he told a graduation class at Georgia State: "We don't do very many things, but when we get the chance to do something that's right and big, we've got to do it. And even to do it in a small scale is just as big a mistake almost as not doing it at all. You've really got to grab them when they come, because you're not going to get 500 great opportunities."

Here is my chat with Paul Henry about Buffet's advice.

3 News