The kiwi dollar's value has dived dramatically in the past week. Photo / Getty Images
When it comes to currency, everything is relative.
While the kiwi dollar's value has dived dramatically in the past week, the real drama in global currency markets has been a surge in the value of the US dollar, rattling the financial balance all over the world.
As the US FederalReserve intensifies its fight against inflation, markets are anticipating even higher US interest rates and capital has poured into the US economy.
Uncle Sam is pulling rank in the fight against inflation and the rest of the world must wait in line.
Imports will get cheaper there, helping the cause. Other nations will pay more - in local currency terms - for imports, making their inflation fight even harder.
It's a reminder that the greenback is still a reserve currency for the world and the financial might of the US still counts for something.
Nations like New Zealand have little option but to watch and wait for signs of a peak in US inflation, and an easing of that country's interest rate outlook.
But if we look outside that US story, how hard has the kiwi really been hit?
The value of the New Zealand dollar has actually been drifting down all year.
Against the US dollar it is off by about 16 per cent since January 1 - from around US68c to around US57c today.
That's bad news if you are planning a US holiday or buying goods on Amazon.com, but when we think about the impact on the wider economy it makes more sense to look at a trade-weighted currency index.
The Reserve Bank uses an index that collates the kiwi's movements against a basket of 17 currencies, using a weighted average based on how significant a currency is to New Zealand's export and import trade.
On that basis, we're looking a bit better.
The trade-weighted index has us down 8 per cent since the start of the year.
Not helpful when we look at import costs, but not catastrophic either.
New Zealanders growing up in the 1980s and 1990s will remember that a US50c dollar was very much the norm.
In 2000 the kiwi dollar hit a record low of US39c.
It also helps that the same financial trends driving currency movements have caused a dip in prices for commodities such as oil.
The Brent crude oil price is now off more than 30 per cent since a peak of US$122 in June.
Are we doing better or worse than our international peers?
If we treat currency markets as an international barometer, then we can get a sense of how we've performed against the US dollar relative to our peers.
Anyone reading the headlines about the British economy will know the kiwi is holding up better than the pound.
The once mighty pound went close to parity with the dollar this week ($1.03), a record low in a relationship that dates back to the launch of the currency (initially a coin) by US Treasury Secretary Alexander Hamilton in 1792.
The UK has been hit with a double whammy of Brexit woes and a controversial new fiscal plan (including tax cuts) that has gone down badly with money markets.
The pound is off by almost 25 per cent against the greenback this year, a fall surpassed among the G20 group of nations only by the troubled economies of Argentina and Turkey (both off by close to 30 per cent).
On Thursday, an unprecedented rebuke by the IMF prompted intervention by the Bank of England to pause the turmoil. But who knows how it will hold.
At least the UK is looking like one of the few nations where kiwi tourists can get a bargain right now, with our currency up about 5.5 per cent on the pound so far this year.
At 16 per cent down against the US dollar for the year, the kiwi has been hit harder than the Aussie dollar but is holding up better than the Japanese yen.
It is roughly on par with the performance of the euro.
The value of the kiwi against our major trading partner China is complicated by the control retained by Beijing - the renminbi (or yuan) is not a fully floating currency.
Regardless, China has been caught in the currency storm this year and this week its currency hit record lows against the US dollar.
The Chinese economy is weaker than it has been in decades as it continues to battle Covid with a zero-tolerance policy.
While the lower renminbi helps keep direct costs with China in balance, its overall impact on trade is limited given that most commodity exports and imports are settled in US currency.
Ultimately, when it comes to trade and the balance of the global economy, the US dollar is king.
Despite the rise of China, the combined strength of the euro and even the growth in cryptocurrencies, there are no signs on the near horizon that this will change.
So despite the sideshow in the UK, it will be all eyes on the US economy - its inflation numbers and interest rates - for the coming months.