New Zealand Dollar Will Fall on Weak Prices, AMP Capital Says

New Zealand’s dollar will decline in coming years as lower commodity prices and a wider current account deficit weigh on sentiment, the nation’s largest non- government investor says.

“The currency should be in the 70s not the 80s,” Keith Poore, head of investment strategy at AMP Capital Investors Ltd., told reporters in Wellington. It bought 81.4 cents at 2:35 p.m. in Wellington.

The currency’s fair value is 65 U.S. cents to 70 cents, Poore said. He expects it will start to decline toward that level, perhaps reaching about 76 cents in a year’s time.

Commodity prices have fallen 8.5 percent in March from a year earlier led by a slump in dairy products, and are forecast to head lower, Poore said. The current account deficit is 4 percent of gross domestic product and is expected to widen in coming years, he said.

To contact the reporter on this story: Tracy Withers in Wellington at twithers@bloomberg.net

To contact the editor responsible for this story: Stephanie Phang at sphang@bloomberg.net