[21 May/NZ Herald]

The New Zealand export sector and general economy looks likely to benefit from the 7 percent fall in the New Zealand Dollar relative to the U.S. dollar. A weaker local currency stimulates export earnings. In the case of Fonterra, the substantially lower NZD would be supportive for farmgate milk prices. ANZ Senior Strategist, Phil Borkin, said weaker currency could translate into a price of nearly $7.00 per kg. He added that trade could be further boosted from already record high levels. Westpac Senior Market Strategist, Imre Speizer, noted most of the decline could be due to the U.S. dollar becoming stronger. He said world currency markets were on their way towards working along traditional lines after years of unusually low interests introduced to combat the aftermath of the financial crisis. The New Zealand’s Official Cash Rate was at a record low of 1.75 percent.