Buoyed by a strong economy, the Kiwi approaches a historic parity.
New Zealanders visiting Australia have long struggled with the currency conversation rate. This may be a thing of the past, given that the New Zealand dollar is now, for the first time in decades, trading almost at parity with the Aussie dollar. At the time of writing one New Zealand dollar was buying A$0.99.
The ascendancy of the New Zealand dollar is largely the reflection of a strong local economy. And should Australia’s Reserve Bank cut interest rates in May, the Kiwi dollar may well reach and hold parity with the Aussie. That is something that has not happened since the currencies were floated – in 1983 for Australia and 1984 for New Zealand.
The upside for New Zealanders is a cheaper trip to Australia and a happy feeling that they have not just caught up with, but actually surpassed, the larger nation. “It sends a strong signal to Kiwis that after years of falling behind the big guy across the ditch we are catching up,” wrote Corin Dann on the TVNZ website. It’s good news for the government too, as despite some economic concerns – regional performance disparities and an Auckland property bubble – the New Zealand dollar is strong and the ruling National Party can take credit for it.
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