It’s fair to say that the New Zealand Dollar rose on Tuesday only because the Australian Dollar did. It was certainly not in reaction to any fresh local news, whether economic or political.
Offshore traders often link the two Antipodean currencies far more than is warranted by a closer examination of relative fundamentals.
As the AUD rallied on a one-line comment from RBA Governor Lowe, so it dragged the NZD in its’ wake. The AUD/NZD cross opened in Sydney on Tuesday morning at 1.1090 and it opens today very little changed at 1.1080… GBP/NZD, meantime, is at 1.9400.
Overnight we have seen the latest official data on overseas visitor numbers. These always make fascinating reading. Short-term visitor arrivals, which include tourists, people visiting family and friends and people travelling for work, reached 3.7 million in the October year, up 8 per cent from a year earlier and a new annual record. Statistics New Zealand says the number of people going to New Zealand on holiday rose 8.6 per cent on an annual basis to 1.9 million people.
During the past five years, annual visitor arrivals have regularly hit record highs, and have risen by more than one million, or 40 per cent, since the upward trend began in 2013. Meantime, people living in New Zealand took a record 2.83 million overseas trips in the October 2017 year, up 11 percent on the October 2016 year.
If the NZD stays down at current levels, then a trip to Middle Earth will now be even cheaper.