The New Zealand dollar's latest act of rebellion has been to indulge in some pugilism with a rather large kangaroo. Though it failed to deliver the knock-out punch, the kiwi easily won on points.
That the kiwi this week came so close to parity with its transtasman counterpart — and probably will yet do so — begs wider, more significant questions.
Is the landmark achievement of parity due solely to cyclical weakness on behalf of the Australian dollar — and thus only temporary? Or is it the result of structural weakness in the Australian economy and structural resilience in the New Zealand one? If the latter, parity becomes the norm. It becomes much more difficult to talk (or moan) about the "high" New Zealand dollar.
It becomes much harder to justify policies — presuming there are any that work — which would pull the New Zealand dollar down to an artificially low level.
It necessitates a huge mind-shift that recognises a fundamental of economics — that strong economies and strong currencies go hand in hand. Just ask the Germans. Just ask the Swiss. Don't ask the Greeks.
It may be the case that if you remember the boom times of the 1960s and early 1970s, you weren't there. But the New Zealand dollar hit an all-time high of US$1.49 then. It is now trading at half that value. So much for the "high' dollar.
Rather than being "unadjusted and unsustainable", the current exchange rate may reflect the fact that the New Zealand economy is not quite the basket-case National's opponents would wish to paint it.
True, a higher dollar is in part down to New Zealand having higher interest rates relative to elsewhere.
But New Zealand's comparatively swift recovery from the recessionary effect of the global financial crisis, its subsequent sustained economic growth and Bill English's unflagging adherence to fiscal discipline has engendered a high degree of international confidence that New Zealand is a very safe haven.
What was notable in this week's flurry over parity was that while the Minister of Finance and Prime Minister made the required noises about the impact on exporters, English and John Key sought to cast the appreciating New Zealand dollar in a more positive light as a by-product of National's careful stewardship of the economy.
But they stopped short of saying it was a cause for celebration. As a former foreign exchange dealer, Key in particular has to tread very carefully in this sphere as anything he says is open to misinterpretation, deliberate or otherwise,
Three decades have passed since the New Zealand dollar was unshackled from an exchange rate mechanism which pegged it to a basket of other currencies and was allowed to float to find its true value.
You can probably count the number of politicians of standing during that period who have had the gumption or the courage to argue that a high exchange rate is indeed more a cause for celebration than commiseration on the fingers of one hand and still have five fingers left over.
To mouth such heresy is to risk being buried (figuratively speaking) under several tonnes of forward foreign exchange hedging contracts.
Moreover, any such espousal of fresh forward thinking regarding the exchange rate has to contend with the belligerence of (mainly) Opposition MPs who will not hesitate trampling over one another in the rush to be the first to be seen to be offering sympathy for those businesses whose balance sheets have been red-inked by a sudden upwards spike in the currency.
It seems to matter not a jot that those politicians can get away with paying lip-service to a lower dollar when they do not seem to have the faintest idea how they might go about achieving that goal beyond rewriting the Reserve Bank's policy targets or the Reserve Bank Act itself.
Even worse are those politicians who do have solutions — ones which are so crackpot that they would cause havoc in the economy. They are the modern-day equivalents of those who sold medicinal elixirs off the back of wagon trains during the Wild West years.
As for the Reserve Bank, its argument that the exchange rate will inevitably fall is based on the fact that it has done so once every decade for at least the last 30 years. On that score, there is also no argument that the New Zealand dollar is more exposed to internationally-generated volatility than other currencies of its size.
But the bank seems to be basing its "unjustified and unsustainable" line on what it thinks should happen. Its stance partially reflects the fact that the surge in recent times of the value of the New Zealand dollar against the United States dollar proved illusory. But then the prospect of the Kiwi dollar retaining its added value once the American economy began to recover was always in doubt.
What is less in doubt is that the distressed state of the Australian economy has pole-axed many assumptions about the relative strengths of the two transtasman economies.
It is also the case that a shift in the mindset regarding the exchange rate is not going to happen next week. It is unlikely to happen next month It probably won't even happen next year. But it is going to happen.
The days when exporters could demand that the exchange rate remained low, thus providing a form of corporate welfare to prop up their enterprises are surely over. Or at least they should be.
