5 Oct 2018

New Zealand dollar falls, petrol prices may rise

8:29 am on 5 October 2018

The New Zealand dollar has fallen to its lowest point in more than two years against several currencies.

No caption.

Photo: 123RF

The kiwi has fallen close to half a cent to a low of 64.7 US cents in the past 24 hours, the lowest point since February 2016.

Sharemarkets in Europe and the United States have fallen sharply because of rising wholesale interest rates, which have followed upbeat US economic data, and anti-China rhetoric from US Vice President, Mike Pence.

The US dollar has risen as a result, with international investors cashing in after Wall Street's recent record breaking run and turning to safer investments.

"The backdrop of a strengthening US dollar, ever widening US-NZ interest rate differentials, further weakness in emerging market currencies, and the overnight moves lower in equities are all playing a part in the NZ dollar's fall," BNZ strategist Nick Smyth said.

The kiwi has held steady against the Australian dollar, but is also down at its lowest level against the British pound, and a basket of currencies of our main trading partners.

The weaker currency is good for exporters because it improves their earnings, but it also raises the price of imports, and is likely to be reflected in further petrol price rises.