This New Zealand Dollar report will address the factors that are likely to affect exchange rates in the coming weeks if you are buying abroad or making a currency transfer. The below table displays the difference in NZD you would have achieved when buying £200,000 over the past month.
|Currency Pair||% Change||Difference on £200,000|
The New Zealand Dollar weakened against the Pound over the course of this week, with Growth figures showing signs of a slowdown in the first quarter of this year being released at 0.5%, less than the 0.7% economists and the Reserve Bank of New Zealand were predicting.
This was partly due to a decrease in building activity, but gains in the dairy sector helped to outweigh this. However, analysts are still optimistic that growth will pick up again over the coming months as the tourism industry continues to flourish, record low interest rates remain and house prices continue to rise.
The US Interest Rate hike will have also been a likely contributor to the recent NZD losses, as investors moved their funds out of the New Zealand Dollar (where the current Interest Rate is 1.75%) and into the safer US Dollar which was increased to 1.25% on Wednesday evening.
However the Kiwi received some positive news overnight as Business PMI (Purchasing Managers Index) for June was released, showing that business conditions in New Zealand had hit a 31 month high in May. The main reason for this was that the Manufacturing sector has been expanding since 2013, which accounts for around 10% of New Zealand’s GDP (Gross Domestic Product).
On Tuesday the GDT (Global Dairy Trade) Price Index will be released and shows the percentage change in diary prices. As Dairy products are New Zealand’s largest exports, this value is key to driving NZD exchange rates, therefore higher prices will likely strengthen the Kiwi.
The Reserve Bank of New Zealand will meet on Wednesday to announce their latest Interest Rate decision. Although expectation is for rates to remain on hold, any signals towards a future change to monetary policy would likely affect NZD exchange rates. Being in contact with your Account Manager here can help you to time your transfer to capitalise on any spikes as they occur.
Thank you for reading my NZD report, if you have any queries about an upcoming transfer I'd be more than happy to assist you, feel free to get in touch here.
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