Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. Below are movements in just a month affecting New Zealand Dollar rates when buying £200,000:
|Currency Pair||% Change||Difference on £200,000|
GBPNZD rates hit a record low of recent times trading at 1.69 in January of 2017. Since then a combination of factors have seen a meteoric rise to 1.95, some 25 cents better. This is now the best time to be buying New Zealand dollars since the referendum vote 18 months ago and clients looking to purchase a property in New Zealand or send funds there for any reason are in a very strong position. The main reason for this trend has been the political situation in New Zealand with concerns over the policy direction of the new Labour government. Recent dairy auctions too, of WMP (Whole Milk Powder), one of New Zealand’s chief exports, have been unsuccessful with the price falling. This has given investors less confidence longer term over the strength of the New Zealand economy.
Finally, the pound has been benefitting from improvements in the outlook over Brexit which has helped it to hit these fresh highs. The big question is to what extent this rise will continue and what the best way forward is, for clients looking to buy or sell New Zealand dollars and pounds.
Another big factor on the New Zealand dollar is the prospect of lack of raising interest rates. Typically the raising of a central banks interest rate will see the respective currency much stronger. Looking ahead sterling could gain further against the Kiwi since the expectation is that the RBNZ (Reserve Bank of New Zealand) will keep their base interest rate on hold ‘for a considerable period’.
Whilst sterling has been boosted by the news the UK have agreed a Brexit bill, overnight the RBNZ Financial Stability Report also helped the New Zealand dollar. Indicating risks to the New Zealand banking system had reduced in the last 6 months and government’s moves to limit the housing market were working, the report was very positive.
Despite this report and the fact longer term the New Zealand dollar may rise owing to any interest rate hikes, the general wind is with Kiwi buyers at present. For Kiwi sellers buying pounds more used to trading levels at 3 kiwis to pounds, the current offering is however not bad going at all.
If you need to buy or sell pounds and New Zealand dollars there are many key issues contributing to the current rates so please get in touch to discuss them and discuss what course of action may suit you best.
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