Net migration to New Zealand hit a four-year high last month – and the country’s currency has climbed with it. A relatively buoyant economy has both slowed the stream of young kiwis crossing the Tasman Sea to work and propelled the New Zealand dollar to a five-year high against its Australian counterpart.

In the year to date, the kiwi has climbed 10 per cent against the Australian dollar, while in the past three months it has gained more than 6.3 per cent to $0.8264 against the US dollar, the strongest performance in the G10 group of liquid, rich country currencies. The Australian dollar’s rise of less than 1 per cent to $0.9381 against the dollar over that period makes it the weakest G10 currency after the Japanese yen.

The divergence is striking because the Antipodean currencies – favoured by hedge fund investors for their high returns and because they are viewed as a proxy for the Chinese economy – had previously been fairly stable against one another for several years. They strengthened in tandem in 2009 on the flood of global liquidity, with the kiwi fluctuating from about A$0.73 to A$0.83 to the Australian dollar.