This report will examine the factors that could affect exchange rates this week in order 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 during the past month.
|Currency Pair||% Change||Difference on £200,000|
The New Zealand Dollar, the 11th most widely traded currency, gained by almost 3.4% against the Pound last week. These gains were seen as a movement in the right direction from the newly formed government. There was also an uplift in recent milk production that went some way towards the gains seen for the NZD.
In other news, projections for the labour force in New Zealand were updated with larger figures which seemed to also strengthen the New Zealand Dollar. In these updated figures they recognised the growing population from immigration and equally the ageing workforce.
In 1991 just 1% of the labour force was over 65 years old, currently that age range represents 6% and this is expected to grow to 9% within the next 10 years.
Last week we had the latest update with regards to the budget in New Zealand from their recently elected labour government. It madegenerous spending promises in social programs and a new program to try and resolve the problem with expensive housing. This increased spending is seen as a positive thing for the currency as it pushes up inflation and increases the potential for interest rates in the future.
The government did however put forward a bill in parliament on Thursday that will outlaw the acquisition of existing residential homes by overseas buyers. This idea when first released did weaken the currency as international investor’s moved out of the NZD. This law is expected to be passed early next year so expect a similar impact on the value of the currency when this comes into effect.
This week is a key week, on Tuesday evening they released Import, export and trade balance figures and on Wednesday their latest Gross Domestic Product (GDP) figures. GDP figures remains the most comprehensive economic indicator and is likely to have the largest impact on the price of the NZD. These are quarter 3 figures which last time came in at 0.8%. This week’s release is expected to show a final figure of 0.6%. If there is a higher figure released expect the NZD to get a lot more valuable. Over this event most expect the NZD to either get a little cheaper to buy or a lot more. The risk is really for the NZD buyers over this event.
Thank you for reading today’s market report, I would greatly appreciate any feedback you have aand would be happy to assist you with any of your currency requirements. Feel free to e-mail me at firstname.lastname@example.org.
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