A new high for the dollar

The NZ$ hit a new high against the US$ dollar today. The above graph shows monthly averages except for Feb 08 which is yesterday’s peak.

NBR and NZPA report that we hit 81.5c and some traders are picking 90c.  Earlier forecasts were for a peak of 83c to 95c though.

Also of interest is  Westpac is picking the Reserve Bank to increase interest rates twice this year. Ouch. But an interesting call from the Canterbury Manufacturers Association for a variable rate compulsory superannuation saving scheme. So when inflation starts to increase, you increase the compulsory deduction rather than put interest rates up.

It’s a nice idea but will only affect personal consumption but business activity, so I am unsure whether it would be as effective as the cash rate.  But just like Don Brash’s suggested variable petrol tax – it would be good to model.