Ben Fletcher
Client Relationship Manager
NZD feeling the China pinch
Is the New Zealand economy heading for a slowdown?
Request a quoteNew Zealand’s economy could be set for a slowdown as their largest trading partner is starting to show signs that it's struggling, following the volley of tariffs from Trumps US Government. Chinese data is beginning to show the effect of Trump's regime and with little sign off a deal being reached between the US and China there could well be further pressure to come.
| Currency Pair | % Change (Month) | Difference on £200,000 | |
|---|---|---|---|
 GBP |  NZD | 3.60% | NZD $11,840 |
The Reserve Bank of New Zealand (RBNZ) had cut the interest rates in May and there doesn’t look to be any further cuts this year according to analysts at Standard Chartered Bank. However, if the poor performance from China continues to spill over that may not be the case in three months’ time if it continues to take effect.
New Zealand Business PMI Data
The latest Purchasing Managers Index (PMI) data was released last night showing a major decrease in the expected result. The release was expected to show a figure of 54.4 and an improvement from last month however it was shown to be 50.2. Anything above 50 is considered positive however the business executives across New Zealand who are surveyed for this data clearly have some concerns with regards to effect of the current events moving forwards.
It’s hard to see past the China factor being a significant one, and unless the New Zealand Central Bank do anything there may not be much of an effect on the NZD.
In the last month the the GBP/NZD interbank rate has moved from 1.97 down to 1.905 so there could be further volatility over the course of the next few months.
There is little data expected next week for New Zealand so once again the external influencers may remain centre stage. If you do have plans to sell or buy New Zealand dollars you may wish to consider setting a rate alert so if there is any major swings your account manager can alert you.
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