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Parity with Australian dollar creeping closer

Author
Alexia Russell ,
Publish Date
Wed, 1 Apr 2015, 8:54AM
(Stockxchng)
(Stockxchng)

Parity with Australian dollar creeping closer

Author
Alexia Russell ,
Publish Date
Wed, 1 Apr 2015, 8:54AM

Updated 9.51am: We're creeping towards parity with the Australian dollar, sitting again this morning at just over 98 cents.

Finance Minister Bill English says for the last 30 years there's been a belief that fundamentally the Australian economy is stronger than ours, so it's a good sign.

While it boosts our purchasing power across the Tasman, there's a downside.

"There's going to be a bit of a challenge for exporters. We've got very resilient exporters, some of these exporters were selling against the US market, the dollar went against them so they shifted to the Australian market. Some of them are going to shift back."

JMIS director Andrew Kelleher says there are several contributing factors.

"Reflection in the different confidence levels in the economy, Australia's got falling commodity prices and they're worried about the China slowdown. They've got a weaker outlook than us."

Andrew Kelleher says New Zealand has far more solid growth than Australia.

"The Reserve Bank could deal to the currency and in fact they've got the official cash rate to deal to the Auckland housing market through the macro prudential tool, so I think there's a solution there."

 

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