This New Zealand Dollar report will examine the factors that could affect exchange rates in the coming weeks 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 yesterday. For current live exchange rates click here.
|Currency Pair||% Change||Difference on £200,000|
The New Zealand dollar continues to see considerable volatility with the political uncertainty that has followed after the New Zealand general election which resulted in a hung parliament. Both the National Party and Labour-Green are trying to form a government with New Zealand First which puts the leader Winston Peters in the position of kingmaker holding the balance of power. Peters has indicated that he would make a decision by October 12th which could see another very volatile couple of weeks for the kiwi dollar. His statement read “I will not make a decision tonight or tomorrow until I have talked to all of New Zealand First… that will take us some time. We invite you to be patient. Don’t ask who we are going to go with.”
The New Zealand dollar has also come under additional pressure after the German election outcome was worse than expected for Chancellor Angela Merkel leaving a fragmented parliament which doesn’t bode so well for the perceived riskier currencies.
The Reserve Bank of New Zealand meet this evening and will announce the latest interest rate decision. Rates in New Zealand currently sit at a record low of 1.75% and it is expected that the central bank will maintain this level later today. This meeting is particularly important as it is the first headed by acting Governor Grant Spencer although he will invariably seek to calm the markets amidst all the political uncertainty.
Rates are now expected to remain on hold until the end of the year with the consensus that the earliest hike could arrive some time in 2019. The New Zealand economy has had a good run of economic growth as a result of high net migration, rising property prices and a strong tourism sector. However there are signs that economic growth is cooling which could be negative for the New Zealand dollar. Depending on the new government’s policies and whether for example net migration is to be cut, could see a slowdown in the economy which would be negative for the kiwi and could actually persuade the central bank to cut interest rates going forward.
For more information on how future decisions could affect your NZD requirement, call our trading floor on 01494 725 353 or email me here.
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