Working as it should

The New Zealand dollar has fallen to a four-year low in the wake of yesterday’s announcement of a reduced payout from Fonterra:

The kiwi touched 71.27 US cents, its lowest since March 2011, and was trading at 71.74 cents at 8am in Wellington, from 72.42 cents at 5pm yesterday. The trade-weighted index fell to 75.26 from 75.92 yesterday. . . .

This is the floating currency working as it should and a lower dollar will make it a little easier for all exporters.

One Response to Working as it should

  1. Bulaman says:

    The way for the currency to reach its “correct” level is for governments to stop borrowing. The distortion of sovereign debt results in the exchange rate going to levels that are not truly reflected by trade.

    Like

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