The New Zealand dollar remains at relatively high levels and has recently been at a post-float high against the US dollar, albeit largely reflecting the weakness in the US dollar itself.
However, as one might well expect, exchange rate volatility has been high of late and there is perhaps more than the usual uncertainty around the likely path of the exchange rate over the months ahead. With banks’ funding costs on the rise, mortgage rates have been increasing in New Zealand and Australia and in some other small open economies recently.