27 Mar 2017

NZ businesses pick a steady NZ dollar

1:32 pm on 27 March 2017

The value of the New Zealand dollar is not likely to change much until next year, according to a survey of businesses, although the Trump White House, European elections and Brexit are all prompting some jitters.

no caption

Photo: 123rf

The latest ASB Kiwi Dollar Barometer indicates most businesses involved in international trade expect the currency to hover around the current level at $0.70, which is little changed from last quarter's survey.

The results showed a large number of businesses believed elections in Europe could be a source of foreign exchange volatility, while the September general election in New Zealand may be cause for some jitters.

ASB Bank chief economist Nick Tuffley said it was more evident with smaller firms.

"This could be because smaller firms have fewer resources to cope with domestic changes and may feel more exposed to any changes that stem from New Zealand's election," he said.

Mr Tuffley said one of the emerging trends from the survey was more New Zealand businesses dealing directly in the Chinese yuan.

"A good 50 percent or so who have traded in the Chinese currency ... although at this stage the amounts tend to be relatively small so people are obviously dabbling in it.

"At this stage it is not the major currency that they are using for their transactions," he said.

Mr Tuffley said the number of businesses dealing in the yuan was expected to rise.

Get the RNZ app

for ad-free news and current affairs