Tue, 11 Aug 2009 12:00a.m.
Five months ago the New Zealand dollar was worth just under 35 pence
By Tony Field
It is not what our exporters will want to hear, but the New Zealand dollar has gained more ground - hitting 41 pence overnight against the pound.
Investors are worried the UK economy might be in even worse shape than expected.
The soaring dollar has also worried Kiwis with money stuck in British bank accounts.
New Zealander Heidi Hall says she has money saved away for a house deposit.
“It's heart breaking. I mean that money is for my home deposit over here and obviously the exchange rate is shocking,” she says.
“Knowing it is at 41 pence is not good at all.”
Five months ago the New Zealand dollar was worth just under 35 pence.
It is over six pence higher now, a world away from the 27 pence it was worth back in 2001.
Mark Olley, LatitudeFX chief executive, says it is unlikely the dollar will rise further.
“Technically it looks as though this 41 level is probably the high, we have seen it reach this level three or four times since 2005,” he says.
“If it broke the 41 level it could get back to that 46 level, which we saw in 1996.”
One reason for the weak pound is that the Bank of England is printing billions of pounds to try to revive the British economy.
Currency strategist Derek Rankin, of Rankin Securities, says the UK economy is in dire times.
“They are marking their growth forecasts down, the government's now nationalised a sizeable part of their banking system, so the UK economy has got a lot of problems,” he says.
The strong New Zealand dollar is welcome news for Kiwi marketing consultant Wayne Taylor, he has just sold his house and is about to move back to the UK.
“We have transferred money both ways. This will be the first time we have ever gained in that currency situation,” he says.
The New Zealand dollar has also gained against other currencies like the US Greenback - eating into the returns of exporters.
The volatile New Zealand dollar is also making it tough for the exporters to plan ahead.
But for Kiwi Heidi Hall, she can only hope that future predictions come true, experts say the dollar is well over-due for a fall.
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