Talk Money: October 13, 2015

  • 13/10/2015
(Paul Henry)
(Paul Henry)

The New Zealand dollar is making a comeback.

It has gained 7 percent in value in just under three weeks.

It is trading at 67.36 US cents this morning compared to 62.62 cents on the 23rd of September.

Rising diary prices are one reason the Kiwi is gaining in value. Another factor is the low interest rates offer in countries like the United States. Investors believe there is now little prospect of the US Federal Reserve hiking American rates before next year.

A stronger dollar will help ease the cost of imported goods. That will add to New Zealand's already very weak inflation numbers.

What does that mean? Economists say it makes another interest rate cut more likely. That could possibly happen this month and certainly before the end of the year.

That is welcome news if you are borrowing money, but not so good if you rely on term deposits for extra income.

Watch the video for the full Talk Money segment.