This in turn means that, if there is a perception that New Zealand is in a difficult period, for whatever reason, the New Zealand dollar tends to fall in value (and vice versa). This tends to offset some of the impact of a weaker international environment.
And this is precisely what has happened over the last year or so, with the New Zealand dollar down from its peak by some 28 per cent against the US dollar and by 17 per cent against the Trade-Weighted Index (TWI).