One man’s meat is another’s poison. The lower NZ-Aussie cross rate is welcomed news for exporters who can expect to present better deals to Aussie buyers if the NZ stays below A77c. However, NZ lamb exporters are moaning as the pound has been weakening against the NZ dollar, making lamb more expensive in the UK.
The Otago Daily Times wrote that the rise of the NZ dollar against the sterling (around 46.30p to the NZ dollar) is bad timing for the NZ lamb season. The UK accounts for 25% of our lamb exports.
About 50 per cent of New Zealand manufacturing exports go to Australia and it is New Zealand’s biggest trading partner overall while the UK ranks 6th.
NZ dollar speculators will be back if the NZ Reserve Bank moves to raise official cash rate middle of this year. The Reserve Bank of Australia recently raised its benchmark interest rate to 4 per cent, widening the yield between the Kiwi and the Aussie.