13 Jun 2013

Downward dollar boosts exporters, but consumers pay more

6:55 am on 13 June 2013

The decline in the New Zealand dollar is giving exporters a boost, but consumers will pay more for imported items and petrol.

The currency peaked in April at around US86 cents, and dropped by 7.5% during May. On Thursday the New Zealand dollar was trading at a little under US80 cents.

The kiwi has been retreating in the face of a strong US currency, and Dairy New Zealand chairman John Luxton says that's good news for farmers.

Mr Luxton says every 1 cent fall in the US/New Zealand dollar cross rate increases dairy earnings by about 10 cents per kilogram of milk solids.

Consumers, though, will pay more for imported products like televisions, and the Automobile Association believes petrol costs will rise further.

Economists are predicting the currency may strengthen again over the next few months. Currency strategist Derek Rankin of Rankin Treasury says the kiwi may return to between US81 cents to US83 cents by the end of the year.