The New Zealand dollar has been performing relatively well of late against a basket of major currencies including the pound and US dollar, hitting the best levels against the pound in 3 weeks on Friday. These NZD gains can likely be attributed to the recent softening in stance from the US Federal Reserve regarding its 2019 interest rate plans, and a more positive global outlook to the US-China trade wars, which had weighed heavily on the value of the New Zealand dollar last year.
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US Federal Reserve chairman Jerome Powell spoke earlier this month and suggested that the US economy was performing well, and that the FED would take a more patient approach in raising interest rates this year, prompting investors to hold their funds in the New Zealand dollar instead. To add to this, the US and China held a series of trade talks in Beijing last week in an effort to end the trade wars which have caused concern globally, and according to sources these discussions were extremely positive. Higher level discussions are now expected to take place later this month in Washington. As the New Zealand dollar is a commodity currency which is more at risk to global factors, this lightening of the mood around the globe has helped the New Zealand dollar to strengthen.
There are a number of economic data releases which could impact the value of the New Zealand dollar this week. This evening Business Confidence figures for the final Quarter of 2018 will be released. As these cover the period when the US-China trade wars were at their peak I wouldn’t be surprised to see this figure come out below the previous reading of -30, which could cause the New Zealand dollar to lose some of the ground gained last week. On Tuesday the Global Dairy Trade auction will take place and is usually a driver for NZD exchange rates, as the economy relies on its dairy exports.
However I would expect Tuesday to be very volatile for GBP/NZD exchange rates in particular, as the UK Government will vote on whether or not to pass Theresa May’s withdrawal bill, which it is widely expected she will lose. For more information on how this could affect your New Zealand dollar transfer, get in touch with the trading floor today on 01494 725353.
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