Are The Good Times Here For The New Zealand Dollar?

But as always there are some who seem to almost be taking advantage of the situation.  And one of these would be the New Zealand dollar.

Now if you have been keeping an eye on progress between the New Zealand dollar and the British pound over the space of quite a few months, you will have noticed something interesting.  You will see that the figures they produce on any currency converter tend to swing up and down quite a lot over the course of time.  For example, in one week alone the New Zealand dollar might lose out on several cents against the pound – and then the following week it could be the same again.  Or it could gain them all back again, and then some.

But the New Zealand dollar has certainly done better and been a more consistent performer as this worldwide recession has done its damage.  Several news stories have picked this out and reported on it, and the Radio New Zealand website has also reported on it, as you can see from this link.

So let us take a closer look at what might be going on here.  We certainly know that the US dollar has been having a somewhat rocky time of late.  It is the reserve currency everyone tends to fall back on, but of course things change and while it still is the main reserve not everyone is so keen these days.  It may not stay this way forever, but it looks as if the New Zealand dollar is one of the currencies that is benefiting from this situation.

Let’s go back to the 28th April 2009, when one New Zealand dollar would buy you 0.5573 US dollars.  Have things changed since then?  You bet they have – and they have gone in favor of the Kiwi dollar.  Just one day later and things improved to 0.5709, but of course some of these changes are inevitably temporary.  This was proven when the Kiwi dollar slipped back to 0.5678 on the following day.

Monday the fourth of May dawned bright and early for the Kiwi dollar, but it also ended very brightly.  By the close of play it was bagging 0.5715 US dollars per Kiwi dollar.  So it was back up and ready for a fight once more.

The following day got better still, and the New Zealand dollar proved that this nice little run might turn into a longer one.  The final figure for the 5th was 0.5828, and suddenly we were wondering whether the Kiwi had enough strength in it to take this battle even further.

And on the 7th of the month it proved that the answer would be a resounding yes.  Why was this?  Well it managed to push things against the American dollar still further, which meant we were suddenly looking at an exchange rate of 0.5969.

A teeny tiny slip the following day hardly seemed worth noting, but it still brought us to 0.5958.  We were close now to breaking that 0.60 barrier – but could the Kiwi dollar actually manage that against the mighty Titan that was the American dollar?

Somehow it didn’t surprise us to learn that when the first day of the following week ended, it was the Kiwi dollar that had claimed yet another victory.  By then it stood at an impressive 0.6022, and the next day it managed to push that up a little more too, ending on 0.6066.

So where will things go next?  Clearly the New Zealand dollar is benefiting from the growing unease about the stability of things in America.  The recession always has far reaching consequences, and this is a classic example of what can happen. 

It will be interesting to see how long this pattern of events lasts for.  Obviously there are days when the American dollar manages to regain a little headway and claws back part of a cent here and there.  But the advantage clearly seems to be with the Kiwi dollar at the moment, and there is every reason to suppose that this could carry on being the case for quite some time yet.

The Kiwis will be making the most of it.