Saturday, 30 June 2007

NZD now over 0.7700

As expected, the NZD has moved over 0.7700, as posted previously in April.
Still looks to have the legs to test into the 0.7900/0.8000 area, but starting to look overdone there.

Some reasons:

NZ is a democracy.
NZ is AAA rated.
NZ does have sovereign fiscal surpluses.
NZ has no exchange control.
NZ has free and open borders.
NZ has an independent legal system.
NZ is benefiting from a commodity boom, especially in dairy prices.
NZ is well away from the trouble spots of the world.
The USD itself is weak.
Japanese and Swiss interest rates are low.

Oh, and New Zealand has the highest interest rates in the industrial world.

Certainly a factor, but not the only factor. If high interest rates created strong currencies, then latin american countries in the past would have had the strongest currencies in the world.

NZ exporters need to sell on value not on price. NZ exporters need to be the Prada of their industry. The currency should not be an issue. By arguing for a lower NZD all the time what they are really saying is "this is crap and the only reason you will buy it is because it is cheap".

NZ lamb and NZ products should be expensive on the world markets because they are the best.
There is no comparison between NZ lamb feeding on fresh grass and living in a clean, green environment, drinking pure water etc and what they call a herd in Europe feeding on meal pellets and god knows what.

Until we learn this lesson and stop selling on price certain exporters will always be bleating.

The recent debate in the UK had the Irish companing our lamb was too cheap! We should immediately put the price up so that we are the most expensive..because we are the best!!

Excellence attracts customers, just look at New Zealand wine.


To The Max said...

Exclusivity is always reflected in the price and NZ needs to believe in its export products and tourist industry that they can compete on the world market on the other hand importers are not passing on the high $ benefits to the consumer.

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