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Currency and inflation questions, answered
Exchange rates and the spread a bank takes, what inflation does to a sum over time, and comparing prices across years.
Every answer below is taken from the calculator or guide that works the number out, and each heading links back to it so you can put your own figures in. Nothing here is advice, and where a rate or threshold applies the page that owns the answer holds the current figure.
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Hedged vs Unhedged Fund Calculator NZ 2026/27
Should I choose a hedged or unhedged international fund?
Neither is better in general, and the honest answer is that it depends on a currency movement nobody can predict. On the worked example, an 8.00% index return with the New Zealand dollar falling 5.00% gives an unhedged return of 13.68% against a hedged return of 7.85%, a difference of 5.83 percentage points in favour of unhedged. If the dollar had risen 5.00% instead, unhedged returns 2.86% and hedged wins by 4.99 points. The choice is about which risk you prefer to carry, not which produces more.
What does hedging actually do?
It removes the effect of currency movement on your return, so you receive the index return in New Zealand dollar terms regardless of what the dollar does. It does not reduce investment risk, only currency risk, and it costs something to maintain. On the worked example a 0.15% hedging cost turns an 8.00% index return into a 7.85% hedged return, which is the price of certainty about the currency component.
Why is the unhedged return not just the index return plus the currency move?
Because the two compound rather than add. An 8.00% index return with the New Zealand dollar falling 5.00% is not 13.00%, it is 13.68%, because the currency gain applies to the grown value rather than the starting value. The difference is small at modest movements and grows quickly at larger ones: a 15.00% fall in the dollar turns an 8.00% index return into 27.06%, not 23.00%.
What currency movement makes hedged and unhedged equal?
On the worked example, a 0.14% rise in the New Zealand dollar. That is the break-even and it is very close to zero, because the only thing separating the two is the small hedging cost. Any meaningful fall in the dollar favours unhedged and any meaningful rise favours hedged. The practical reading is that this decision is almost entirely a bet on currency direction, with the hedging cost as a small thumb on the scale.
Does a falling New Zealand dollar help or hurt my international fund?
A falling New Zealand dollar helps an unhedged international fund, because the foreign assets it holds are worth more when converted back. On the worked example a 5.00% fall adds 5.68 percentage points to the return. It does nothing to a hedged fund, which is the point of hedging. The reverse applies when the dollar rises, and that is when unhedged investors discover how much currency risk they were carrying.
Is hedging worth the cost over the long term?
Over very long periods currency movements tend to matter less than they do in any single year, because they fluctuate rather than trend indefinitely. That argues for not paying to hedge a long-term global equity holding. Over shorter horizons, or where the money has a known New Zealand dollar purpose at a known date, the currency swing can easily exceed the investment return and hedging removes that uncertainty. Horizon is the more useful question than opinion about the dollar.
How much of my return comes from currency rather than the market?
More than most investors realise. On the worked example, 5.68 of the 13.68 percentage point unhedged return came from the currency, which is 42% of the total. In a year when the index is flat and the dollar moves 10%, effectively all of your return is currency. An unhedged international fund is a position in two things at once, and only one of them is the market you meant to buy.
Can I hold both hedged and unhedged versions?
Yes, and splitting between them is a common approach for investors who do not want to take a view on the currency. A fifty-fifty split halves the currency exposure and halves the hedging cost, producing an outcome between the two lines in every scenario. It guarantees you will never have made the best choice and also never the worst, which for a decision that is genuinely unpredictable is a defensible position rather than a fudge.
FX Spread vs Fee Calculator NZ 2026/27
Is a 0% FX fee really free?
Rarely. The cost moves into the exchange rate instead of appearing as a fee. On the worked example a platform advertising no fee offers 0.5760 against a mid-market rate of 0.5850, which is a 1.538% mark-up. Converting $10,000.00 there gives US$5,760.00 instead of the US$5,850.00 the mid-market rate implies, so it costs US$90.00 while charging nothing.
What is the mid-market rate?
The true rate, sitting halfway between what buyers and sellers are quoting at that moment. It is what a search engine or a currency site shows when you look up an exchange rate, it is free to check, and no retail customer gets exactly it. It is the benchmark every real cost is measured against, which is why it is the first input on this page.
Can a platform charging a fee be cheaper?
Frequently, and that is the point of running this. On the worked example the platform charging 0.35% gives the mid-market rate and costs 0.350% in total, while the platform charging nothing costs 1.538%. The one with the visible fee is 4.40 times cheaper, and picking on the advertised fee alone would cost $118.85 on a $10,000.00 conversion.
How do I calculate the mark-up in an exchange rate?
Take the mid-market rate, subtract the rate you are offered, and divide by the mid-market rate. On the worked example that is 0.5850 minus 0.5760, divided by 0.5850, which is 1.538%. The awkward part is that a rate quoted to four decimal places gives no intuition at all about what it costs, which is exactly why the mark-up hides so well.
Where do I find the rate a platform will actually give me?
Start a conversion and read the rate quoted at the point of confirming, before committing. Marketing pages tend to show the mid-market rate or a rate without the mark-up applied. The number that matters is the one on the confirmation screen, and comparing that against the mid-market rate at the same moment is the whole exercise.
Do both a fee and a mark-up ever apply?
Yes, and it is the hardest case to spot because the visible fee makes the pricing look transparent. On the worked example one platform charges 0.10% and also marks the rate up by 0.513%, giving a true cost of 0.612%. Six times as much of that cost is in the rate as in the fee, so the advertised figure describes a small fraction of what is being charged.
How much does the mark-up cost on a large conversion?
It scales exactly with the amount, since both the fee and the mark-up are percentages. On the worked example the gap between the best and worst option is 1.188 percentage points, which is $118.85 on $10,000.00 and would be $1,188.46 on $100,000.00. The percentage is what to compare on, because it holds at any size.
Can I avoid currency conversion altogether?
For share investing, often yes. A New Zealand domiciled fund holding foreign assets is bought and sold in New Zealand dollars, so you never convert anything and never face this question. The fund handles the currency internally at institutional rates and the cost sits inside its fee, which is a comparison on total cost of ownership rather than on conversion charges.
Multi-Currency Portfolio Exposure Calculator NZ 2026/27
How do I know my portfolio's currency exposure?
Add up the underlying assets of every fund by currency, then apply each fund's hedging. On the worked example three funds holding $50,000.00 give 66.60% net foreign currency exposure, of which 42.45% is the United States dollar alone. Nothing reports this, because each fund is presented separately and the hedging is stated somewhere else again.
Does buying a fund in New Zealand dollars remove currency risk?
No, and this is the most common misunderstanding in the whole subject. The currency the unit price is quoted in has nothing to do with the currency the underlying assets are denominated in. A New Zealand dollar priced fund holding United States shares moves with the United States dollar, because what it owns is denominated in United States dollars. Only hedging changes that.
What does hedging actually do?
It converts foreign currency exposure back into New Zealand dollar exposure, so the fund's value tracks the underlying market without the exchange rate on top. On the worked example a fund that is 50% hedged converts $4,500.00 of foreign exposure back, taking the portfolio's foreign exposure from 75.60% down to 66.60%. Hedging is not free and the cost sits in the fund's fee.
What happens to my portfolio if the New Zealand dollar rises?
Foreign assets are worth less in New Zealand dollar terms. On the worked example a 10% rise costs $3,027.27, which is 6.05% of the whole portfolio, with the underlying markets doing nothing at all. A 10% fall gains $3,700.00, or 7.40%. The gain and the loss are not symmetrical, which surprises people and is simply how the arithmetic works.
Why is a 10% currency move not a 10% change?
Because the conversion is a division, not a subtraction. If the New Zealand dollar rises 10%, foreign assets are multiplied by 1 divided by 1.10, which is 0.909091, a fall of 9.09% rather than 10%. If it falls 10% they are multiplied by 1 divided by 0.90, which is 1.111111, a rise of 11.11%. That asymmetry means a fall in the currency helps slightly more than an equal rise hurts.
Is high foreign currency exposure a bad thing?
Not inherently, and for a New Zealander there is a reasonable argument that it is a benefit. The New Zealand dollar tends to weaken when global conditions deteriorate, which lifts the New Zealand dollar value of foreign assets at the moment domestic conditions are worst. That is a useful offset. The point of measuring it is that it should be a position you know you hold rather than one you discover.
Should I hedge my international investments?
It depends on the horizon and on what the money is for. Hedging reduces year to year variation and costs something every year whether or not the currency moves. Over long periods currency movements tend to matter less than the underlying returns, so many long-term investors leave equities unhedged and hedge bonds, where a currency swing can dwarf the yield. Money needed at a known date is a different case.
Where does most unrecognised currency exposure come from?
KiwiSaver, because it is usually the largest holding, usually carries significant international assets, and its hedging policy is stated in documents most members have never opened. A balanced fund can be half international with only part of that hedged. Leaving KiwiSaver out of this calculation understates the answer more than any other omission.
Currency Converter NZ 2026
What exchange rate does this currency converter use?
It uses live mid-market rates sourced from the European Central Bank via the Frankfurter API, updated each business day. This is the interbank reference rate, not the retail rate your bank or a foreign exchange provider will actually give you.
Why does my bank give me a different rate to this converter?
Banks, card networks and foreign exchange specialists add their own margin or spread on top of the mid-market rate shown here, plus sometimes a flat fee. The difference can be a few percent, so use this converter as a guide to the true rate, then compare it against what your provider actually quotes before a large transfer.
How often are the exchange rates updated?
Rates refresh once per business day. Currency markets move continuously during trading hours, so treat any conversion as a same-day snapshot rather than a rate you can lock in, especially for time-critical or large transfers.
Inflation Calculator NZ 2026
What is the Inflation Calculator NZ 2026?
New Zealand inflation calculator. See what any item will cost in the future at a given inflation rate. Projects prices 1 to 100 years ahead. Use it to understand purchasing power erosion and plan savings goals accordingly.
Is the Inflation Calculator NZ 2026 free to use?
Yes. The Inflation Calculator NZ 2026 is free to use on Calculate.co.nz, with no sign-up, paywall or account required.
Is the Inflation Calculator NZ 2026 made for New Zealand?
Yes. It is built for New Zealand and uses current New Zealand rules and rates where they apply. Results are indicative estimates and not financial advice.
Grocery Inflation Calculator NZ
How much has the grocery shop gone up?
Food prices have risen noticeably in recent years. This calculator applies the food inflation over a period to your weekly shop to show the increase in dollars per week and per year.
What inflation rate should I use?
Use the food price inflation over the period you are looking at, from Stats NZ food price data. The calculator takes it as an input because it changes over time.
How can I cut grocery costs?
Comparing unit prices, buying specials and house brands, planning meals and reducing waste all help. The calculator shows what the rise is costing you, which is motivation to act.
Inflation Calculator
How does inflation affect my money?
Inflation raises prices over time, so the same amount of money buys less. At 2.5 percent inflation, something costing 100 dollars now would cost about 128 dollars in ten years.
What inflation rate should I use?
The Reserve Bank of New Zealand aims to keep inflation between 1 and 3 percent, averaging around 2 percent, so a long-run figure of 2 to 3 percent is a reasonable assumption. Recent years have at times been higher.
Is this based on official CPI figures?
No. It uses an assumed average annual rate that you choose, which is ideal for projections. For official historical figures, see the Reserve Bank of New Zealand inflation calculator and Stats NZ.
Inflation Pay Gap Calculator NZ
How do I know if my pay kept up with inflation?
Adjust your old salary up by the inflation over the period to see what it would need to be today just to keep pace. If your current salary is above that, you are ahead in real terms; if below, your buying power has fallen.
What inflation rate should I use?
Use the cumulative inflation over the period between your two salaries, drawn from the Consumers Price Index. The calculator takes this as an input because inflation changes over time.
What is a real pay rise?
A real pay rise is an increase above inflation, so your buying power actually grows. A rise that only matches inflation leaves you no better off, and a rise below inflation is a real-terms pay cut.
NZ Inflation Rate Analysis
What is a normal inflation rate in New Zealand?
The Reserve Bank of New Zealand aims to keep annual inflation between 1 and 3 percent over the medium term, with a 2 percent midpoint. Readings inside that band are considered normal; well above it is high inflation, and below it is low.
How is inflation measured in New Zealand?
By the Consumers Price Index (CPI), published quarterly by Stats NZ. The annual rate compares the index to the same quarter a year earlier, capturing the change in the price of a representative basket of goods and services.
Is current inflation high by historical standards?
This tool answers that directly by ranking the latest annual rate against every year in the series. A high percentile means inflation is high relative to recent history; a low percentile means it is low.
Personal Inflation Rate Calculator NZ 2026
What is a personal inflation rate?
It is how fast your own cost of living is rising, based on what you actually spend, rather than the national average. Because everyone's spending mix is different, your personal rate can be well above or below the official CPI, especially if rent, food or fuel dominate your budget.
Why is my inflation higher than the official CPI?
The CPI is an average across a fixed national basket. If you spend a large share on items that have risen faster than average, such as rent, insurance or food, your personal rate will be higher. The official figure can genuinely feel too low for your situation.
How can I use my personal inflation rate?
Use it to set a realistic budget, to judge whether a pay rise actually keeps you ahead, and to set a savings or investment return target that beats your true cost of living rather than just the headline CPI.
Sharesies and Hatch FX Cost Calculator NZ
What fees apply when buying US shares from New Zealand?
Typically a transaction fee on the trade and a foreign exchange fee to convert New Zealand dollars to US dollars. Both eat into how much actually gets invested, and the FX fee applies again when you sell and convert back.
Why does the FX fee matter?
Because it is charged on the full amount you convert, every time. On frequent small trades the combined transaction and FX fees can be a meaningful drag, so larger, less frequent investments are more fee-efficient.
Do fees differ between platforms?
Yes. Transaction and FX fees vary between Sharesies, Hatch and other providers and change over time. Enter your platform's current rates for an accurate figure.
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Answers are gathered from the calculators and guides listed above and are general information, not advice. Last reviewed 2026-09-06. See also the finance glossary, the guides and the reference data.