Why NZ dollar could surprise

Currency is a particularly important topic for New Zealand investors, fund managers and advisers due to the high volatility of our dollar, the movements of which can often dwarf actual investment returns.

And according to Tower head of fixed interest Craig Alexander, the market has got it wrong by expecting the Kiwi to fall from its current level of about US82c.

He said Tower expects the dollar to continue to trade in the US80-90c range, while the consensus expectation is that the dollar will trade between US65c and US80c.

“By clear observation you would say we are at the top of the range,” he said.  “The reason we disagree is that we think there has been a structural change in the constituents that make up the value of the Kiwi dollar.”