14 Jan 2014

Dollar tipped to be on par with Australia

3:50 pm on 14 January 2014

A resurgent economy has economists tipping the New Zealand dollar to reach parity with the Australian dollar some time this year.

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Photo: 123RF

HSBC economist Paul Bloxham said that just as Australia's mining boom over the past decade helped push up the value of the dollar, the New Zealand currency is also expected to get a boost.

"We expect that the New Zealand dollar might even get to Aussie dollar parity for the first time in 40 years," he said.

"That's a big deal for New Zealand of course, because it will put some pressure on the traded sectors of the economy."

The Australian dollar was buying 108.38 New Zealand cents at the close of trade on the Australian stock market on Monday.

The New Zealand economy's upward spiral is being attributed to high dairy prices, low interest rates and a construction boom in post-earthquake Christchurch.

HSBC forecasts that New Zealand will be among the world's fastest growing economies.

Mexico, Israel and Chile are the only Organisation for Economic Cooperation and Development (OECD) countries expected to post stronger growth than New Zealand this year.