Today the New Zealand dollar has likely turned a few knuckles white. The NZD reached it’s lowest point in over three years as investors sold euro and bough US dollars, which weakened other currencies against the greenback. Our dollar reached 74.25 US cents this morning meaning it reached it’s lowest point since November 2011 when it hit 73.67 cents.
The NZ Herald explained the chain of events saying, “The local currency was trading at 74.36 US cents at 8am in Wellington, from 74.50 cents at the New York close and 75.10 cents at 5pm in Wellington on Friday. The trade-weighted index declined to 76.92 from 77.24 on Friday.”
Investors have been keen to resurge the US economy due to expected rising interest rates, as opposed to Europe, where the European Central bank announced a 60 billion euro asset purchase programme to stimulate the regional economy and amid uncertainty about the prospects for Greece, where exit polls from the weekend election suggest the anti-euro Syriza may gain an outright majority.
Over the ditch, Australia has also witnessed a stumbling dollar value. Investors speculated that a slump in commodity prices, low inflation topped by a round of interest rate cuts by other central banks signal weak global demand. This could prompt Australian and New Zealand Reserve Banks to reduce interest rates.