Kiwi at five-year high vs aussie
More Kiwis are expected to book Australian holidays after New Zealand's dollar hit a five-year high against its trans-Tasman counterpart.
However, exporters are beginning to hurt, as the kiwi closed yesterday at A90.36c, off an intraday peak of A90.56c earlier in the day. The last time the kiwi traded at these levels was in 2008.
House of Travel commercial director Brent Thomas said the high kiwi made an Australian holiday more affordable. Australia was already the No 1 destination, with more than 1 million Kiwis heading across the Tasman each year.
But, the high dollar and additional airline capacity from New Zealand to Australia meant even more holidayers would be heading across the ditch next year, Thomas said.
Tourism Australia expected 4.9 per cent growth in the New Zealand market, with an extra 4000 New Zealanders travelling to Australia each month, Thomas said.
When the high New Zealand dollar was highlighted people were more likely to impulsively book holidays, he said.
Thomas said he expected an increase in bookings for Christmas holidays and long weekends to Australia next year.
OM Financial senior foreign exchange and derivatives adviser Stuart Ive said the New Zealand dollar had continued its rally from recent weeks against the Australian currency.
The Reserve Bank of Australia's decision to leave interest rates unchanged at 2.5 per cent led to more investors buying the New Zealand dollar. The New Zealand official cash rate is also 2.5 per cent but is expected to rise early next year.
The New Zealand's dollars the next resistance level was A90.9c, Ive said. If the kiwi broke through that barrier it would be eyeing the A95c mark, a high not hit since 2005.
"We're closing the gap fairly rapidly," he said. If the New Zealand dollar did surpass A90.9c it would become an issue for exporters and the Reserve Bank, Ive said.
ExportNZ executive director Catherine Beard said the extent of exporters' troubles would depend on how long the kiwi persisted. While the high New Zealand dollar did create challenges for exporters, hopefully there would be some easing soon, she said.
Australia had a big domestic population and it had not fared as badly as a lot of other global markets, she said. Australia was still an important market for exporters, especially hi-tech manufacturers and value-added food and beverage exports. Fairfax NZ
- © Fairfax NZ News
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