This update examines factors that could affect GBP/NZD exchange rates in the coming weeks.The table below shows the difference you would have received when buying £200,000 at the high compared to the low over the last month.

Currency Pair% ChangeDifference on £200,000
GBP/NZD4.2%NZD $15800

New Zealand Dollar and trade balance data

In a relatively quiet week for data releases in the New Zealand and Australian part of the world just a few focal points have emerged for any of our clients with a New Zealand Dollar requirement to watch out for.

Firstly, very early tomorrow morning we will get a glimpse into trade balance data for New Zealand economy. Anyone with a planned GBP/NZD transfer over the past few months will be keenly aware that the Kiwi has suffered from deteriorating milk prices (one of its main exports) and stuttering demand out of the main consumer in the region, China.

Trade balance will be key to seeing how the New Zealand economy is trending heading into what is their winter, where they will not be receiving the same beneficial boost from the high tourist season, which brings foreign visitors and investors demanding NZD and driving up its value.

Previously in March its exports were valued at $4.65bn, this will be the yardstick at to whether the New Zealand Dollar will continue its strong run against the Pound to begin the week. It seems investors are betting that it will with the Kiwi gaining almost two cents against the Pound on Monday’s trading.

The budget and the New Zealand Dollar

If currency markets can make inferences about future revenues for the New Zealand economy based on trade balance data, then Thursday’s budget delivered by Finance Minister Steven Joyce, will likely be more explicit.

It also important to remember that this is an election year, and this is the final opportunity to make a strong financial argument for the incumbent Government to be allowed to stay. It’s fair to say that very positive spins will likely be taken, and again will encourage investors to bet in the New Zealand Dollar’s favour.

All the above paints the picture of a sudden escalation in risk for New Zealand Dollar buyers holding out for a better rate of exchange. It may be wise to quickly get in contact with your account manager here in order to avoid being caught out by further deteriorations in your buying position.

For more information on how future data releases could affect your currency transfer, call our trading floor on 01494 725 353 or email me here.

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.

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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.