Flat-out exporters are helping push the New Zealand dollar to levels not seen in at least seven years against the Australian dollar.
While New Zealand consumers are likely to benefit from falling prices on goods from Australia, a higher New Zealand dollar against major trading partners reduces returns for exporters, who are currently in their busiest time of year.
The kiwi reached fresh seven-year highs on Monday night against the Australian dollar, above 93Ac, and is at new three-year highs against the United States dollar, above 52.5USc.
The average level of the kiwi against the United States dollar over the past 10 years is 55USc, but analysts are picking the kiwi to move to 60USc or 70USc this year.
Importers Institute chief executive Daniel Silva said importers were likely to pass on any benefits from a higher kiwi against its Australian counterpart. Many consumer goods were sourced from and manufactured in Australia.
But the rising New Zealand dollar is expected to worsen the current account deficit.
High interest rates and a robust economy growing about 4 per cent last year boosted the kiwi from a low around 42USc at the start of the year, and 82Ac.
Bancorp Treasury Services director Derek Rankin said part of the kiwi's recent rise was attributable to the weakening greenback, which was at three-year lows against the euro and 3 1/2-month lows against the yen.
The kiwi was also being pumped up by exporters, who were in full swing during the summer season.
"There are a lot of people away, and of course the export community is whizzing away out there," Rankin said.
"Product is going on ships and it will be over the next two or three months, so [exporters] are doing deals all around the world and are worried about the exchange rate so they're locking it in."
During the past six years, the kiwi had fluctuated on average 18 per cent annually against the US dollar, and about 12 per cent against the Australian dollar, Rankin said.
Last year the kiwi gained 25 per cent on the greenback and 13.5 per cent on the aussie.
It would become clearer by March whether the New Zealand dollar could sustain its current levels, Rankin said.
"We'll probably push higher, but when we get more depth in the market we'll see how solid these moves actually are."
- NZPA
Exporters pump up NZ dollar
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