New Reserve Bank of New Zealand spoke yesterday, and seems to be more open to sharing information about the plans of the RBNZ than his predecessor Graeme Wheeler. He set a dovish tone when he spoke yesterday and said that markets shouldn't be anticipating any interest rate hikes for the foreseeable. CAD weakened slightly against Sterling following this speech. The table below shows the difference in Canadian Dollars you could have achieved when buying £200,000.00 during the high and low points of the past week.
|Currency Pair||% Change||Difference on £200,000|
The new Reserve Bank of New Zealand Governor in the early hours of the morning delivered his first speech following the Central Banks Interest rate decision. The RBNZ unsurprisingly chose to keep rates on hold however the Governor Gordon Orr has set out a dovish stall early on
Orr suggested that the markets should not be anticipating any hikes, the NZ Dollar did climb slightly before his speech and warned that the risks are of cuts in 2018 as opposed to hikes.
Following the speech, the NZD has given up 3 cents against Sterling with a £200,000 now able to achieve you $5,400 more than it could yesterday evening.
The speech was heavily anticipated and the new Governor is considered a much better communicator with the media than Graeme Wheeler, who was an advocate of not letting the markets know in advance what the Central Bank would do. The RBNZ have also marginally cut the GDP forecast for this year along with suggesting a rate hike won’t take place until quarter three next year at the earliest, which is three months later than the last forecast at the start of 2018.
Considering the movement that has taken place overnight coupled with the central banks prediction on weaker economic performance it seems hard to see how the Dollar is not going to give up further ground in the coming weeks.
There has only been one other occasion since November last year that the GBP/NZD touched the current levels just below the 2.00 mark and I believe we will now cross that level before the Summer.
Considering in the years running up to the Brexit cliff edge the New Zealand Dollar traded against Sterling for two years above the 2 dollars to a pound level, we’re once again not far from that point. If you’re looking to sell NZD in the near future it may be worth looking into your options now before the markets move again.
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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