Introduced in 1840, the New Zealand Pound was the first official currency of New Zealand. Until that point, both British and Australian coins circulated in New Zealand, and continued to do so until 1897. The Pound banknotes were produced by the six different trading banks until 1924, when a single uniform design was implemented.
Current circulating coins
- This means that if milk prices are on the rise the New Zealand economy is likely to be doing well, which will push up the currency.
- Until that point, both British and Australian coins circulated in New Zealand, and continued to do so until 1897.
- The peg rate changed multiple times until 1985, when the currency began to freely float in the market.
- Other economic factors, such as growth rate, GDP, unemployment, and inflation are strong and, therefore, lead to a strong currency.
- However, overall, NZD is considered a stable currency due to the strength of the New Zealand economy and its outlook.
- The most recent issue of New Zealand banknotes is the seventh series, first released in October 2015 and May 2016.
Investors once favored the New Zealand dollar as a carry trade currency but the New Zealand carry trade has become less appealing as the RBNZ has aggressively reduced interest rates to combat slowing economic growth and subdued inflation. In 1967, notes were introduced in denominations of $1, $2, $5, $10, $20 and $100, with all except the $5 replacing their pound predecessors. $1 and $2 notes were discontinued in 1991 after being replaced with coins. Decimalization of the NZD (division into 100 cents) took place in 1967 when the New Zealand dollar replaced the New Zealand pound at a rate of two dollars to one pound. Initially pegged to the United States dollar, NZD went through a series of changes in the fixed exchange rate until March of 1985, when the currency was allowed to float freely.
In 1999, series 6 polymer notes replaced the paper notes. The designs remained much the same, but were changed slightly to accommodate new security features, with the most obvious changes being the two transparent windows. It took another 30 years before the Reserve Bank replaced the currency of pounds, shillings, and pence with actual dollars and cents. In the year 1967 alone, the Bank printed 27 million new banknotes and 165 million new coins. They add hidden markups to their exchange rates – charging you more without your knowledge.
What Is New Zealand’s Third Largest Trading Partner?
The final releases were given more conservative designs in line with public expectations. Traders purchase the New Zealand dollar and sell a lower-yielding currency to execute a carry trade, such as the Japanese yen. The objective is to profit from the interest rate differential. But the New Zealand carry trade has become much less appealing as the RBNZ has aggressively reduced interest rates to combat slowing economic growth and subdued inflation. Altogether it has five coins and five banknotes with the smallest being the 10-cent coin; smaller denominations have been discontinued due to inflation and production costs. These are the average exchange rates of these two currencies for the last 30 and 90 days.
The idea of decimalization was first raised in 1933, but was not put into place until 1967, when the New Zealand Dollar replaced the New Zealand Pound. There was much public discussion over what the new currency would be called, with ideas such as ‘kiwi’ and ‘zeal’ being proposed, but in the end, the term ‘dollar’ was chosen. The New Zealand Dollar was initially pegged to the US Dollar at a rate of 1.62 USD to 1 NZD. The peg rate changed multiple times until 1985, when the currency began to freely float in the market. In 1999, a new design for the New Zealand Dollar was released in an attempt to modernize, with the new bills being made of polymer.
NZD/USD is affected by factors that influence the value of the New Zealand dollar and/or the U.S. dollar in relation to each other and other currencies. For this reason, the interest rate differential between the Reserve Bank of New Zealand the secret to stock market success (RBNZ) and the Federal Reserve (Fed) will affect the value of these currencies when compared to each other. All investment services are provided by the respective Wise Assets entity in your location.
Convert US Dollar to New Zealand Dollar
The New Zealand government has produced polymer or plastic why beginners dont enroll in online trading course versions of the New Zealand dollar since 1999. The polymer composition has also increased the longevity of the banknotes. Polymer bills are estimated to last four times longer than regular linen or paper banknotes. Banks and traditional providers often have extra costs, which they pass to you by marking up the exchange rate.
These currency charts use live mid-market rates, are easy to use, and are very reliable. During the turbulence in global financial markets during mid to late 2008, the cumulative net long positions held by Japanese margin traders in the NZD fell by nearly 90%. Since 1999, the New Zealand government has produced polymer or plastic versions of the New Zealand dollar, which has made the note more secure against counterfeiting. In addition, the new polymer composition has increased the longevity of the note.
Our smart tech means we’re more efficient – which means you get a great rate. Compare our rate and fee with our competitors and see the difference for yourself. Our currency rankings show that the most popular US Dollar exchange rate is the USD to USD rate. NZD is one of the most traded currencies in the world, making it a liquid currency in forex markets. The NZD currency has a long history of colorful and vibrant money and, since its first issuing, has changed its printed design several times.
Current circulating banknotes
Gross domestic product is a measurement of the value derived from a country’s production of goods and services over a specific period. The country’s top industries include agriculture, dairy, forestry, fishing, mining, and tourism. New Zealand is one of the world’s largest exporters of whole milk powder so the NZD would most likely benefit if milk prices rise.
The New Zealand dollar trades under the symbol NZD or NZ$. It floated on March 4, 1985, at an initial exchange rate of 44 cents against the 5 common mistakes when choosing liquidity providers U.S. dollar. The financial markets have since determined the currency’s value with the unit typically ranging between 39 and 88 cents against the greenback. A new series of notes, known as Series 5 was introduced in 1992. The obverse of each note featured a notable New Zealander, while the reverse featured a native New Zealand bird and New Zealand scenery.
The currency usually has a bird on one side of a banknote or coin as well as an important historical figure of New Zealand. A floating currency is one with value that is permitted to change as it’s compared to other currencies. Check live rates, send money securely, set rate alerts, receive notifications and more. Create a chart for any currency pair in the world to see their currency history.
The strength of a currency tends to fluctuate so the strength of the NZD may not always be so strong. However, overall, NZD is considered a stable currency due to the strength of the New Zealand economy and its outlook. Tourism is a strong economic driving force for New Zealand, so when tourism is doing well in the country, the currency will tend to be stronger.
It is estimated that the polymer note lasts four times longer than regular linen or paper notes. Interestingly, the polymer note can go through a washing machine without suffering any material damage. In 2016, the currency had its most recent update, with even more bright colors and updated security features. The kiwi also circulates in Tokelau, Pitcairn Islands, Niue, and the Cook Islands in addition to being the official currency of New Zealand. New Zealand bill denominations include $5, $10, $20, $50, and $100. On 11 February 1991, aluminium-bronze $1 and $2 coins were introduced to replace existing $1 and $2 notes.[19] In 1999, Ian Rank-Broadley’s portrait of the Queen was introduced and the legend rearranged to read “NEW ZEALAND ELIZABETH II”.