Business

Strategist expects NZ dollar to continue to drop

10:34 am on 16 August 2018

At least one currency strategist is expecting the New Zealand dollar to continue to fall against the greenback.

Photo: 123rf

The strengthening US dollar has seen the kiwi fall to a two-year low of around US65.5 cents.

But Derek Rankin told Morning Report he doesn't think it has hit bottom yet.

He expects the NZ dollar will drop to US62 cents by November.

"We're in the import season ... where importers are bringing in products for Christmas, once that's done and dusted you start to get the export season underway and I think the NZ dollar will start to recover somewhat."

The current fall in the kiwi was the result of a strong US dollar, he said.

"It's a trend that's going on around the world." - Derek Rankin speaking to Guyon Espiner

"It's more a story of the US dollar strength, than NZ dollar weakness per say."

However, the local economy was slowing down with static interest rates predicted, falling business confidence, and uncertainty caused by government reviews and policies, Mr Rankin said.

"I would argue that the economy feels soft and I think the New Zealand dollar is set to go lower."

He said business confidence across several surveys and the uncertainty of future government policy has an impact on the NZ dollar.