Lewis Edmonds
Affiliate Relationship Manager
Donald Trump’s Tweet weakens the NZD
Graeme Wheeler attempted to jawbone NZD as New Zealand exports suffer from a strong run of late.
This New Zealand Dollar report will examine the factors that could affect exchange rates in the short term to help you stay informed if you need to make a currency transfer. The table below shows the difference you would have received when buying £200,000 at the high compared to the low yesterday.
| Currency Pair | % Change | Difference on £200,000 |
|---|---|---|
| GBP/NZD | 1.5% | NZD $5680 |
Donald Trump does what Graeme Wheeler couldn’t
The Reserve Bank of New Zealand boss spoke on Wednesday in his last speech before he retires in September. He tried to deliberately talk down the currency, or "jawbone" it, as a strong New Zealand dollar does little to help boost New Zealand's exports.
The New Zealand Dollar had weakened at the start of the week following North Korea's missile launch over Japan. However, as tensions eased, the New Zealand Dollar regained some strength. This was until a Donald Trump tweet yesterday afternoon which sparked fears of war once more in the Korean Peninsula. If tensions escalate, I wouldn’t be surprised to see the NZD retreat again.
China’s economy helps to boost the NZD
Moody’s, the international investor service raised China’s growth outlook following stronger than anticipated economic growth figures in the first half of the year. The agency raised the growth outlook from 6.6% to 6.8% for the second half of 2017.
Additionally, last night official manufacturing data from the purchasing managers index (PMI) which provides an insight into China’s largest manufacturers came in better than expected with a reading of 51.7 for August. A reading above 50 signals expansion, and this can be put down a recovery in exports and has helped to calm fears that the world’s second largest economy was slowing down. China is New Zealand’s largest trading partner so any positive data out of China normally helps to boost the NZD.
Tomorrow, more PMI reading will be closely monitored however this time the focus will be for small and mid-sized manufactures from the latest Caixin/Markit report. If this figure shows an increase it could provide the NZD with another small boost, however I expect the main driver for the time being to be focused on the possibility of further unrest between North Korea and the United States.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353 or email me here.
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