Bad Currency News & Random Economic Musings
During the time that we've been here the US dollar has taken a pounding by the Kiwi dollar. It's been a rollercoaster, with the US dollar buying $1.50 as a high and buying $1.20 as a low. It's been in the $1.30 range for a couple of weeks now, but slowly sliding down from the $1.35 it bought in mid-October.
This could be much worse news for us, since the Kiwi dollar hit an all-time high against most major currencies in July. It, like the US dollar, has been falling since, but not at the same rate of devaluation that has plagued the US dollar.
On a day-to-day basis, this isn't earth-shatteringly bad. Debi is paid in US currency, but because it's every two weeks, there's some built in dollar cost averaging. We also haven't seen the wild upswing in gas prices that people in the US are facing. Gas here has gone up about 6%, but other prices have remained pretty constant. In the US, the average gas prices are up by about 9% in the past month alone.
Long-term, though, this presents a serious problem. It's hard to think about brining over a big chunk of money to use as a down payment on a house. During the time that we've been here, a hypothetical $50,ooo US would have yielded as much as $75,000 NZ or as little as $60,000 NZ. That's a fairly wide swing in a short time. If one goes back even further, when I first starting thinking about this move, the $1 US was equal to about $1.75 NZ--and that was low, because for most of 2000, 2001, and 2002, the US dollar was worth more than 2 Kiwi dollars.
This is only compounded by the fact that real estate prices here in NZ are relatively high (though comparable or perhaps even a bit cheaper than what we left behind in the Seacoast region of NH) and are possibly on the edge of a US-style bubble. Added to that, a 'good deal' on a mortgage here is just shy of 9% and adjustable after 5 years. (They don't seem to do 30-year fixed-rate mortgages here.)
I don't know what all this means besides that I need to stay away from XE and FxHistory.
This could be much worse news for us, since the Kiwi dollar hit an all-time high against most major currencies in July. It, like the US dollar, has been falling since, but not at the same rate of devaluation that has plagued the US dollar.
On a day-to-day basis, this isn't earth-shatteringly bad. Debi is paid in US currency, but because it's every two weeks, there's some built in dollar cost averaging. We also haven't seen the wild upswing in gas prices that people in the US are facing. Gas here has gone up about 6%, but other prices have remained pretty constant. In the US, the average gas prices are up by about 9% in the past month alone.
Long-term, though, this presents a serious problem. It's hard to think about brining over a big chunk of money to use as a down payment on a house. During the time that we've been here, a hypothetical $50,ooo US would have yielded as much as $75,000 NZ or as little as $60,000 NZ. That's a fairly wide swing in a short time. If one goes back even further, when I first starting thinking about this move, the $1 US was equal to about $1.75 NZ--and that was low, because for most of 2000, 2001, and 2002, the US dollar was worth more than 2 Kiwi dollars.
This is only compounded by the fact that real estate prices here in NZ are relatively high (though comparable or perhaps even a bit cheaper than what we left behind in the Seacoast region of NH) and are possibly on the edge of a US-style bubble. Added to that, a 'good deal' on a mortgage here is just shy of 9% and adjustable after 5 years. (They don't seem to do 30-year fixed-rate mortgages here.)
I don't know what all this means besides that I need to stay away from XE and FxHistory.
posted by Jon A at
9:47 AM
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