KEY POINTS:
On one simple level the strength of a nation's currency is a measure of its wealth.
So, although our exporters will never let us forget how important a fall in the dollar is, for the rest of the us the prospect is not nearly so appealing.
For the
past five years, with the kiwi trading above the US70c mark, New Zealand has been a more vibrant and interesting place than in the early part of the decade when the dollar traded as low as US38c.
It is cheaper to travel outside the country for a start. Then there are the cheaper imported goods - from petrol to big-screen TVs to books on Amazon.com.
The currency effect ripples through everything in our lives. Consider live music.
It's no coincidence that the country has seen a big increase in the number of international performers visiting in the past few years. Most get paid in US dollars. The amount of kiwi dollars a promoter can get for each US dollar has a big impact on ticket prices.
A megastar like Stevie Wonder is already commanding as much as $199 for premium tickets to his show in Auckland this October.
That price would have been set with the kiwi dollar still trading close to US80c. At US60c the tickets would have been nudging $250 and it may not have been viable for him to make the trip from Sydney.
A fall in the value of the New Zealand dollar is the world's way of reminding us we are not quite so well off as we thought.
There is no doubt that a dairy- and tourism-fuelled boom has created real wealth, but the country's economic growth rate doesn't justify a dollar above US80c.
The high peaks of the past few years have been caused by weakness in the US dollar and the greed of currency speculators looking to cash in on our high interest rates.
As consumers we've been enjoying a bubble which was never destined to last.
Those infamous Japanese housewives will soon look to cash up their Uridashi bonds and our exporters and tourist operators will be smiling again.
Currency trading is such a fast moving game that when the dollar falls it tends to fall fast - as it did this week. But it gets oversold, it rallies and then it falls again.
Picking its every move is a mug's game - as any exporter will tell you. Even currency experts tread carefully.
Like predicting the weather, it is easy enough to see the storm clouds brewing but difficult to say exactly when the storm will arrive and how strong it will be.
There may be more US dollar weakness and more kiwi spikes up ahead. But the long-term trend for the dollar is lower.
How much lower it goes and where it will bottom out is anyone's guess. This is a pain we need to go through to kick-start another round of economic growth.
But hopefully we never see the dollar at US38c again. Exporters have proved they can cope with life above US60c and they are leaner and meaner for the experience.
The rest of us just want a dollar that is strong enough to keep us playing in the first division of the global economy.
Liam Dann is the Herald's business editor
