After years of gains, the New Zealand dollar is finally in retreat.
On its Trade Weighted Index, the Kiwi has fallen as much in the past three months as it has gained over the past three years, with far-reaching implications for the primary sector.
Declines in the value of the currency will go some way towards offsetting weakness in the dairy sector and will present a bonus to those parts of the primary sector that are already performing well.
Along with lower domestic interest rates, lower dairy prices are helping to depress the exchange rate, which will bring wider benefits to the economy, says Bank of NZ senior economist Craig Ebert.
"As undeniably weak as dairy prices are, the extent to which they are helping to drag down the NZ dollar is breathing benefit into the wider tradeables sector," he says.
It's been a long time coming, but exporters now have a currency that is less hostile to their bottom line.
Not so long ago, in early April, the currency was a close to reaching parity with the Australian dollar. Today it is still relatively high at A$90c but well short of parity.
Last year, the Kiwi came very close to setting a new post-float high against the US dollar when it hit US88.38c. It now trades at around US67c, down 24 per cent.
Since the end of April, the currency has dropped sharply against all New Zealand's main trading partners: 12 per cent against the US dollar, 11 per cent against the yen, 5.9 per cent against the Australian dollar, and 11.8 per cent versus the renminbi. Even against the longsuffering euro, the Kiwi has dropped 10.7 per cent in value over the same period.
"The currency has come a long way in a short space of time, so in some ways it's hard to judge the impact because of things like currency hedging and so on, but we think it's a material correction," says Ebert. Exporters and importers typically use hedging to lock the currency in at a certain level for a certain time to coincide with export receipts being repatriated.
The magnitude and speed of the most recent decline will mean some exporters are hedged, or locked in, at above the current spot rate, meaning some will be "out of the money".
Ebert says the latest price action also serves as a reminder about how frustrating the currency can be for the primary sector when it reaches those high levels.
"But it really has unwound a lot of that in the last three months, so we are still assessing he wider impact."
BNZ now expects the Kiwi to fall to US65c by the end of this year, and US64c by the end of 2016.
ANZ has downgraded its Fonterra forecast to $4.50/kg of milk solids from $5 to $5.25, while ASB has cut its forecast to $5 a kg from $5.70 after the last GlobalDairyTrade auction saw prices overall slide by 5.9 per cent.
Fonterra itself has a $5.25 per kg forecast on its books, compared with $4.40 per kg for the season just passed.
The effect of the worse than expected dairy auction, plus expectations of a more aggressive easing stance from the Reserve Bank after it surprised the market with a quarter of a point cut on June 11, have sped up the currency's decline.
Since the Reserve Bank's June 11 missive, the NZ dollar's trade weighted index has fallen by 4 per cent to per cent to 70.30.
Currency strategists expect the Kiwi to move lower still but, as always, much depends on how events the Greek sovereign debt crisis, China's sharemarket meltdown and America's encouraging but modest economic recovery play out.