Just as New Zealanders start planning their first overseas travel since Covid led to lockdowns, they find their dollar has slipped in value against other major currencies.
This could be of particular concern for those senior citizens who were looking forward to having a break during New Zealand’s winter months in the sunshine of Australia’s Gold Coast.
The irony of the fall in the value of the NZ dollar is its contrast with Finance Minister Grant Robertson’s insistence that the NZ economy has performed strongly (under his guidance) through the pandemic.
On that point some authorities have noted the NZ dollar has lost ground in comparison with Australia, even though NZ has higher interest rates than Australia.
But if Kiwis think the beaches in Hawaii might offer better value for their dollar than those of Queensland, they will have to think again, because the NZ dollar has slipped also against the greenback.
There is a further message in the comparison with the AUD. It implies financial markets have concluded that the Australian economy is more productive than NZ’s.
The positive to be drawn from the currency movement is that NZ’s export sector will have higher returns, (in local dollar terms). The dairy industry may find it offsets the lower prices recorded in the fortnightly Fonterra GDT auctions, if the fall against the US dollar to below 65USc is sustained.
On the other hand industrial commodities have been falling sharply: this movement means that returns for aluminium (from the Bluff smelter) and methanol (from the Motunui plant) will be lower.