Positive signs suggest New Zealands economy is strengthening, with the latest unemployment figures showing a sharp decline to 4.9%.
Last night employment data and participation data was released for the first quarter in New Zealand, showing vast improvements. The unemployment rate dropped from 5.2% to 4.9% in what was an unexpected movement, with the employment change up 0.4% to 1.2% compared to the last quarter. There hasn’t been a huge amount of market movement in response to this data, which suggests there are other causes for concern.
The UN have released a survey on New Zealand revealing they’re upbeat over the economy with net migration and tourism supporting the economy.
The survey suggested low inflation would boost private consumption however there were concerns over the increase in housing prices as construction capacity was nearly maxed out.
There was further risks with the influence the Chinese markets have on New Zealand along with the effect that the US economy could have on the NZD.
Over the last month a £200,000 transfer into NZ dollars would have seen you achieve $21,540 trading at the high from the low. Whilst the market has started to move against sellers the rate is still trading at a level only achievable since the UK Brexit to Leave against Sterling.
In the next few months there could be further gradual weakening as talk of an interest rate cut in New Zealand may start to increase with inflation staying at a low lever. However if the currency loses further ground that may create a boost to exports which have been expensive over the past 8 months.
Being in contact with your broker could make sure you’re trading at your desired level. By setting a rate alert in the market it will mean your account manager will be in contact you when your rate is reached.
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