This New Zealand Dollar report looks at the cost of sending money overseas this week and the factors that could affect your currency transfer. The table below shows the difference in NZD you would have achieved when buying £200,000.00:
|Currency Pair||% Change||Difference on £200,000|
Despite the current negative outlook for GBP, it has actually managed to gain value against the NZD of late. This welcome support has helped drive GBP/NZD rates up towards 1.93 at this week’s high. Despite the NZD finding some support around the current levels, it is struggling to make any real impact.
Sterling is now trading 10 cents higher than it was at this time last month, which proves how unpredictable the current market remains. To put this in monetary terms if you were transferring £200,000 now compared to last month you be gaining an additional 20,000 NZD.
The reason for the current spike in Sterling’s value is likely to do with a major crisis of confidence in the New Zealand economy, which is inadvertently boosting the Pound’s value.
Investors have been pulling their funds away from the NZD ever since the recent political changes in New Zealand, where Labour leader and new Prime Minister Jacinda Ardern has taken power. This came at the expense of previous PM Bill English, who was for the most part a popular leader, who actually acquired more of the public votes than Ardern.
However, due to the political system in New Zealand he did not acquire enough of the percentage to form a majority and it was ultimately the very unpopular Populist Winston Peter’s, who helped Ardern gain power by forming a coalition government.
Due to their policies and some would say even radical stances on a majority of issues, investors have shied away from the NZD.
The upturn for the Pound is somewhat fabricated due to this lack of confidence in the NZD and as such, the Pound remains fragile in my opinion.
This becomes even more apparent when you consider how much pressure Sterling is against the majority of major currencies at present, with the political unrest and stagnating Brexit negotiations dragging the Pound’s value down.
For this reason I would be very tempted to take advantage of the current highs, which would not be available had the political situation in New Zealand been more stable.
For more information on how political instability could affected your currency requirement, call our trading floor on 01494 725 353 or email me here.