Both NZD and AUD went up in value during the past four years due to hot overseas money. Now this money is flooding out of these countries. That so called carry trade has ended now. Since these countries floated their dollars, Australia and New Zealand have become favourite hot place for worldwide speculative money trading.

Speculative money flows are short term, and will flee at the sight of trouble. There is a regime shift now. AUSTRALIAN bond futures are weaker as hedge funds reacted tothe situation.

There are some benefits in lower NZ dollar and Australian dollar

1. Rising import cost will bring some relief for New Zealand and Australian -based manufacturers.
2. Export sector will expand. A lower dollar makes export prices more attractive for overseas buyers,boosting our domestic output.
3. New Zealand andAustralian companies with significant overseas operations also will benefitbecause the lower dollar boosts the repatriated profit of companies with overseas operations.

My ideas are not a recommendation to either buy or sell any security orcurrency. Please do your own research prior to making any investment decisions.