This New Zealand Dollar report will examine the factors that could affect exchange rates this week in order to help you stay informed if you need to make a currency transfer. The table below shows the difference you would have received when buying £200,000 at the high compared to the low during the past 20 days.

Currency Pair% ChangeDifference on £200,000
GBPNZD2%NZD $7,200

Politics the main driver for GBPNZD exchange rates

Last month’s hung parliament result has caused intense volatility for New Zealand dollar exchange rates, with the GBPNZD bouncing between 1.83 and 1.86 over the last 2 weeks. It seems clear that the markets are pinning a lot of Kiwi’s value on which side Winston Peters, head of the New Zealand first party (the third largest party) decides to join forces with. The National Party or the Labour Party.

What may impact the New Zealand Dollar against the Pound this week?

Judging by the polling over the weekend weekend, it would appear Kiwi holders are hoping Peters opts for the former, as the latter may lead to a more internally focused New Zealand with a closer watch on immigration which would further limited foreign direct investment and in turn weaken the New Zealand dollar.

The NZ First party previously campaigned against Chinese ownership of one of New Zealand’s major meat producer Silver Ferns Farm and called for heavy cuts in immigration.

On the face of things, a tie with Labour then seems the more likely possibility. NZ first met with labour in initial talks over night so it will be interesting to see how the markets react. Much then will hinge on what the Nationals are willing to give up in a bid to maintain power.

Peters has set a personal deadline of Thursday to select a union and as such I expect a fair amount of volatility on Kiwi exchange rates as a result. In a similar fashion as Sterling’s value was anchored with uncertainty whilst the conservatives pushed for a Union with the DUP earlier on in the year, I expect the Kiwi to remain cheaper to buy before Thursday as the markets plan for the worst. As such, if you are looking to buy the New Zealand Dollar with pounds, it may pay to act before Thursday, as it is highly probable the kiwi will recover once the that cloud of uncertainty evaporates.

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

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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.