The weak US dollar continued to bolster the New Zealand dollar strength with the latter at a 23-year post-float high trading around US81.5c yesterday before closing up US0.34c up on the previous close, at US81.16c at 5pm.
Times are expected to only get tougher for New Zealand's meat forestry and manufacturing export sectors as United States growth slows, allowing the kiwi to claw its way towards forecasts of an unprecedented US85c later in the year.
Economic data and listed company results from the US has been glum in recent months spurring suggestions of a pending US recession, with the most recent data from a Philadelphia-based manufacturing survey coming in well below expectations and reports of ‘‘soft'' consumer confidence surveys, National Bank economist Philip Borkin said, when contacted yesterday.
‘‘We have a bias towards some form of slowing globally. If recession fears spreads to Europe and Asia it will prop up the US dollar, as a safe haven [investment], and currencies like the New Zealand dollar will be pushed down,'' he said.
Fisher & Paykel Appliances considered a key manufacturing indicator, has been attempting to stave off the effects of the rising kiwi and rocketing raw materials prices for the past two years.
Yesterday, it added to several hundred redundancies already with confirmation 28 staff at its DishDrawer plant in Mosgiel would be made redundant, citing tighter economic conditions in the US, New Zealand and Australia leading to a downturn in the housing industry, which affects demand for cooking products.
Mr Borkin said annualised growth in the US in 2006 was 4.8%, 4.9% in 2007 but for the last quarter of that year plummeted to 0.6%.
‘‘Expectations for annualised [US] growth are expected around 1.5%,'' he said.
Despite the rapid decline, Mr Borkin maintained National Bank forecasts that the kiwi would trade around US75c-US79c during the first half of this year then trade around the US75c range and drop to US69c by the end of the year.
