New Zealand Dollar - NZD

The New Zealand Dollar (NZD), created  in 1967 to replace the New Zealand Pound , has always had the same destiny as the Australian Dollar – which was also created after the definitive end of the British Empire.

Indexing on the American Dollar with an initial parity (in 1967) of 1 NZD = 1.12 USD, the New Zealand Dollar didn’t integrate the floating exchange rate regime that was the great currencies’ one from 1973, but remained indexed on the American Dollar and then to another currencies basket until 1985.

In March 1985, finally negotiated like a lot of other currencies on the foreign exchange market (Forex) and so mainly under the law of supply and demand (the NZD is today at 11th place of the more exchanged currencies in the world), the parity NZD/USD established at a 0.4444 first “higher point”.

Then the New Zealand Dollar fluctuated with small proportions, to reach an historic lower point (NZD/USD = 0.3922) in November 2000.

An impressive increase followed, with in June 2007 an intervention on the Forex of the New Zealand Central Bank (for the first and last time until today) which massively sold NZD in order to make the currency value decrease.

This intervention failed and the New Zealand Dollar went on apprising against the American Dollar to reach a NZD/USD parity equal to .08213 in February 2008.

As in the Australian Dollar’s case, a lot of analysts thought that this fast apprising was due to the high interest rate policy run by the New Zealand Central Bank. The policy which made investors make more « carry-trade » operations (massive purchases of a currency with a high interest rate in another currency with lower interest rate).

Since mid-2008, the New Zealand Dollar’s depreciation against the American Dollar has been observed on the foreign exchange market (NZD/USD = 0.5559 in April 2009).