But what does this mean?

Well, the exchange rate is determined by the relative trade between the two nations. If someone in London wants to buy lamb chops from a farmer in Auckland he has to pay that farmer in NZD. He buys those dollars from someone in Auckland who needs GBPs to buy beef steaks from a farmer in London. If the same number of Kiwis wants to buy British beef as Brits want to buy New Zealand lamb then the exchange rate is 1:1. If ten Kiwis want to buy British beef but only one Brit wants to buy New Zealand lamb then the exchange rates becomes 10 NZD to 1 GBP (i.e. pounds are more expensive; dollars are cheaper). I think that's right way round.

Of course, in reality it is a bit more complicate than that. OK. It's a lot more complicated than that. The Kiwi is really buying peanuts from a man in New York who is buying cheese from a man in Paris who is buying tomatoes from a man in Rome who is buying rice from a man in Beijing who is buying steak from our man in London. And there is a lot more being traded between counties than odd items of food.

OK, but what does this all mean to us? Well, to a certain extent, very little. Yes, it determines how many dollars we get from the bureau de change, but so what? More relevant to us is what we can buy with these dollars - or, more specifically, how much the things we want to buy cost. We are not interested in the overall international trade market; we are interested in the local supermarket. We need a "personal exchange rate" that better reflects this.

So how does my "personal exchange rate" for NSD add up? Difficult to assess on a short holiday (particularly when you consider that the things I was buying were atypical of my general shopping). Fuel is cheaper (and diesel is considerably cheaper - around 75% the price of petrol). Books are considerably more expensive - even paperbacks. "Two paperbacks - only $35" was advertised as a bargain. Housing is generally cheaper but I think that wages are lower and taxes higher. Utilities are more expensive. Food is more difficult to gauge. Some things were in season in NZ that are not in the UK - and vice-versa. Lamb is expensive; fish is very expensive. And some things you can't get easily (like British marmite, Weetabix (the NZ/Aussie equivalent is similar to compressed cardboard), Old Speckled Hen, jelly cubes and bramley apples). And there are probably many things you can get in NZ that you can't in the UK.