NZ$ ends the week at 12 year high against the British pound

At the end of trading in New York this week, the New Zealand dollar traded at NZ$1.00 = UKP 0.4135, its highest level since June 20, 1997. Against the US dollar, it was at NZ$1.00 = US$0.6814, its highest level in eight months. The US dollar and Japanese yen were hit hard in currency markets at the end of the week following the release of optimistic comments by Fed Chairman Bernanke and better-than-expected of US housing data. The markets are prepared to tolerate an increased risk appetite when it appears the US economy is recovering, and to do that they buy commodity currencies like the NZ dollar. The British currency continues to lose favour for different and more fundamental reasons. It's economy is not performing well, public deficits are surprisingly high, and Standard and Poors' 'negative' outlook may change to an actual rating downgrade soon, some analysts fear. It may seem odd to us, but foreigners have confidence in New Zealand. We are doing 'less poorly' than many other countries, it seems. A high New Zealand currency makes the search for improved productivity in our economy very urgent.