Businesses expecting the New Zealand dollar to fall further and stay weak over the coming year.
NZ firms tell a survey they expect the recent bout of New Zealand dollar weakness to persist. Photo: 123rf
The currency is trading at just over 68 US cents at present and respondents to the ASB Bank's latest survey think it will be lower in 12 months at 65.9 US cents.
In the previous Kiwi Dollar Barometer Survey, three months ago, respondents thought the currency would be 75 US cents.
Since then the US dollar has strengthened and uncertainty, first about the election and then about the policies of the new government, has knocked the currency lower.
"The key take-out from this survey is that respondents expect the recent bout of New Zealand dollar weakness to persist," said ASB chief economist Nick Tuffley.
He said that view differed from the forecasts by the bank's economics team which were that the dollar would rise over the coming year.
Meanwhile, businesses are protecting themselves from the currency uncertainty. Intentions for foreign exchange hedging hit a record high, with 84 percent of respondents planning to hedge.
Businesses expected the next round of currency movements to be driven by events overseas, especially by US President Donald Trump and his policies.
"The US president's unpredictable nature and trade protectionist bent was an obvious concern for respondents," Mr Tuffley said.
Events in North Korea and domestic politics were also mentioned in the survey as factors.
