What determines the exchange rate for the New Zealand dollar?
As is true for any free market the value of the New Zealand dollar versus competing currencies is determined by supply and demand for each currency. Increase in demand for a currency is the result of an increase in the value of the country’s exports, an increase in the country’s economy, or an increase in foreign investment in the country. Conversely supply for a currency increases when the value of a country’s imports rises, when the amount of overseas investment increases, and when residents choose to vacation overseas rather than domestically.