July 3, 2007 6:34pm by David Farrar

The NZ Dollar

The graph above shows the NZ dollar over the last five weeks. The Reserve Bank intervention has clearly been ineffective and only succeeded in diminishing respect for the Bank.

John Key (who is a global expert on currencies) said he thought the NZ dollar could well reach US$0.80 and more and more people are now agreeing with him.

The trade weighted index (I have divided it by 100 on the graph so it goes on the same axis) is also at a record high and has been very much matching the US increase. This is not just a case of a weak US dollar.