This report will examine the factors that could affect exchange rates this week in order to help you stay informed when making a currency transfer. The table below shows the difference you would have received in NZD when buying £200,000 at the high compared to the low for the past month.

Currency Pair% ChangeDifference on £200,000
GBPNZD3.8%$14,250
New Zealand Growth forecasts downgraded by economists

New Zealand Growth forecasts downgraded by economists

New Zealand’s National Party, the opposition to new Prime Minister Jacinda Ardern’s Labour Party, have published an article originally written by Forbes which suggests that New Zealand could be heading for a recession under the country’s new leadership.

The article has heavily criticised the plans to stop foreign investors from buying existing properties, claiming that this is likely to set the country up for a property crisis. Many economists agree with the potential for financial difficulties next year, and Westpac have joined them in downgrading growth forecasts for 2018.

Because of this political instability, the New Zealand Dollar has been struggling against its major counterparts of late. However, better than expected Retail Sales figures for the third quarter released overnight on Wednesday helped the Kiwi to make some gains against the Pound, which was also bolstered by the 2017 Budget painting a bleak outlook of the UK economy.

Other factors affecting the New Zealand economy and therefore the NZD include lower Dairy prices. Dairy products are New Zealand’s largest exported product, and when the prices fall generally so does the value of the Kiwi.

New Zealand Imports at record high

Overnight last night, New Zealand trade data was released including imports and exports, and trade deficit for October. It showed that the trade deficit narrowed from September’s reading, but that the annual trade deficit was slightly higher. Imports also hit a record high, therefore this mixed bag of trade data allowed for very little movement overnight on NZD exchange rates.

The next three weeks will be key for GBP/NZD exchange rates as the UK heads towards a decision on whether Brexit talks can move forward to trade negotiations. However, even with the current economic instability in the UK, the New Zealand Dollar has still been coming off worse lately, battling with its own political concerns.

On Wednesday the RBNZ will release their Financial Stability report, which will be closely watched by investors. Any further negative news could weaken the Kiwi significantly, therefore clients looking to sell New Zealand Dollars in the near future may be wise to move ahead of this announcement to avoid any further potential losses.

Thank you for reading my New Zealand Dollar report, if you have any questions about an upcoming transfer I would be more than happy to discuss them – you can contact me with any queries on 01494 725 353 or email me here.

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Exchange rates on this page are interbank rates and indicate where the market is trading to show the performance of a currency pair. They are not indicative of the rates which we offer. The information on this web site is provided free of charge for information purposes only. It does not constitute advice to any person on any matter. Foreign Currency Direct plc. ("FCD") makes every reasonable effort to ensure that this information is accurate and complete but assumes no responsibility for and gives no warranty with regard to the same.