For the first two days of this week, you’d have been forgiven for thinking that New Zealand had a fixed exchange rate against the Australian Dollar; it barely budged from 1.1080.
By the end of the New York session Wednesday the pair was showing some modest sign of life, having traded down to a low of 1.1061 and it opens around that level in London this morning. Against the very weak USD, the Kiwi Dollar has rallied into the high 68’s with GBP/NZD close to its lows of the week in the 1.9350’s.
Earlier this week, Statistics New Zealand published detailed data on overseas visitor numbers. Today we got to see how deeply those tourists and NZ residents dug into their pockets to spend some money. Overall sales volumes rose 0.2% in the three months ended September 30, following a 2% increase in the June quarter. Eight of the 15 industries surveyed posted higher sales volumes in the quarter, though comparisons with Q2 can be a little misleading. For example, the food and beverage sector - which includes cafes, restaurants, bars, takeaways, and catering services - saw a record fall in both value and volumes in the quarter (down -2.2% and -3.1%). This came after a record gains in Q2.
The explanation, of course is those hungry and thirsty supporters of the World Masters Games and the British Lions rugby tour in that earlier period. Lots of foreign visitors and lots of spending: hopefully they’ve learned not to hand over wads of cash at the foreign exchange bureau in the arrivals lounge. There’s an app for that!!