Key graphs - exchange rate
The US Dollar cross rate should be interpreted as one New Zealand dollar
buying x US dollars. The TWI (Trade-weighted index) is the nominal
NZ dollar exchange rate weighted 50/50 by New Zealand's trade with its
major trading partners and the nominal GDPs (in US dollars) of those countries.
The graph shows monthly averages.
In October 2000 the New Zealand dollar reached record lows, dropping below 40 cents per NZD. However, after 2002, the currency strengthened considerably, reflecting a strong domestic economy, rising export commodity prices and associated increases in interest rates. The TWI behaved very similarly to the US dollar cross rate over most of the decade .
In 2008, continuing financial market uncertainties and a deteriorating global economic outlook saw many investors move into perceived 'safe-haven' currencies such as the USD. As a result the NZD fell sharply against the USD and other currencies in the TWI (the Japanese Yen and Euro in particular), but these falls proved to be quite shortlived. In part that reflected the way in which New Zealand was hit less hard in the recession than many of the countries whose currencies make up the TWI.
Select the chart to the right to see the behaviour of the real
exchange rate over a 40 year period in relation to its long-run average.
Last updated 30 April 2013