This report looks at factors that could impact GBPNZD in the near future.
GBP/NZD rates have recovered slightly since the fallout from the UK’s Brexit decision but have retracted slightly over recent days. Looking back over the past month and we are almost back to the levels we saw prior to the EU referendum but any advancement on Sterling’s current position will be dependent on the BoE’s stance next week. With much of the market focus shifting to the BoE and how they will support a now underachieving UK economy, the majority of investors and analysts alike are of the opinion that an interest rate cut of 0.25% is by far the most likely outcome. As discussed previously this is unlikely to help any further Sterling gains and any additional monetary policy or Quantitative Easing (QE), will only reinforce this feeling.
New Zealand trade balance figures from earlier this week came out above market expectation and this in turn brought about some investor confidence in the NZD. The NZD has made huge advances since the turn of the year, gaining over 50 cents at its high. To put that in context you would have received an additional £15,000 on a 100,000 NZD/GBP transfer. Whilst rates have dipped slightly from this level, we are still seeing some of the best sell prices for those clients holding NZD in the past 5 years.
The New Zealand economy relies heavily on its export industry and therefore any trade deficit figures are looked at with extra scrutiny by investors. With the Reserve Bank of New Zealand (RBNZ) remaining open to further interest rates cut if necessary and any UK economic advancement clouded in uncertainty, much will depend on how the UK facilitate our exit from the EU and whether the RBNZ decide to try and ease the NZD’s value, in order to try and boost exports.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353.
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