New Zealand & Australian Coins
New Zealand and Australia one dollar coins are seen in a picture illustration taken on July 12, 2016. Reuters/David Gray/Illustration

The New Zealand dollar is almost at parity with the Australian dollar. The strength of the New Zealand currency is mainly because of its booming housing market as home prices surged 54 percent.

The Sydney Morning Herald reports the since the free-floating era that started in the 1980s, the currencies of the two countries never converged. However, in April, the Australian dollar dipped below $NZ1.01, or the Kiwi reached 99.79 Australian dollars briefly.

NBR reports that on Thursday, Sept 8, the New Zealand dollar trade-weighted index went up 79 for the first time in 17 months. The kiwi jumped to 74.42 US cents at 8 am in Wellington and traded as high as 74.79 cents late Wednesday.

Reckoned against the Australian currency, the kiwi jumped to 97.03 Australian cents from 96.81 on Wednesday after data from the Australia Bureau of Statistics showed its 2nd quarter GDP missed expectations, expanding 0.5 percent. Experts attribute the surge in New Zealand’s currency to the country’s relatively sturdy economic expansion, comparative high interest rates and recovery of commodity prices.

Australia’s housing boom in mainly home-grown, while the growth in New Zealand is because of record immigration, attracting more offshore capital into its housing market. While Australia’s home prices went up 34 percent over the past five years, during the same period, its current account deficit has worsened. In contrast, for the same period, New Zealand’s remained relatively stable.

But on Monday, TVNZ reports the kiwi traded 73.14 US cents as of 8 am in Wellington. It is the lowest in about a week after it traded 73.33 center in late New York trading on Friday. Against the Australia, it fell to 96.94 from 97.10 cents.

VIDEO: NZ dollar nears parity with Australia

Source: Te Karere TVNZ