The New Zealand Dollar has been up and down over the last 18 years. It has seen a lot of volatility since 2001. Trading in a wide range, with 0.40 being the low in 2001 and at a high of 0.88 in 2014.
However from the chart below we can see that the overall trend against the US Dollar has been up since 2001.
The NZ Dollar, While Volatile, Has Trended Up Against the US Dollar
The above chart would lead us to think that the NZ dollar has been a pretty decent performer.
After all the US dollar is the reserve currency of the planet. And the little ole Kiwi dollar is up against it since 2001.
NZ Dollar 3rd Best Performer Compared to Gold
We also recently came across the table below (hat tip to Chris Weber – our favourite newsletter writer).
It lists the performance of gold in 37 currencies from across the globe. In this table the smallest percentage increase equates to the best performance for that currency.
Or said another one, the currencies against which gold has gone up the least have been the best performers – i.e. they have held their value or purchasing power the best.
As you can see the New Zealand dollar has been the third best performer since 2001. Behind the Czech Koruna and Swiss Franc at one and two respectively.
So That Shows the New Zealand Dollar Has Been Really Strong Doesn’t it?
After all the third best performing currency on the planet is a great achievement isn’t it?
At first glance maybe yes. However look at the percentages.
Gold in New Zealand dollars has still gone up 225% since 2001!
What that is really saying is the New Zealand dollar has been significantly devalued against the historical monetary yardstick of gold.
Or put simply:
The New Zealand Dollar is the third best performing currency since 2001…
BUT it still sucks.
So don’t use the New Zealand dollar (or any other fiat currency for that matter) as a long term form of savings.