On Wednesday at 02:00 GMT, the Reserve Bank of New Zealand (RBNZ) will release the interest rates decision on whether they are changing it or retaining its current position of 1.5%. Between November 2016 to May 2019 it had remained unchanged at 1.75% before its recent reduction of 0.25%.
|Currency Pair||% Change (Month)||Difference on £200,000|
If the RBNZ shows a hawkish approach and raises its interest rates back up to previous levels to meet current inflation levels, this could be an indicator of positive economic growth for the country down under and may cause the NZD to rise following the release.
However, this can swing the other way and could see the interest rate unchanged or even reduced. The uncertainty and significance of this release typically causes a lull in the currency market and may drive people to transfer their funds into safe haven currencies such as the USD or the Swiss franc (CHF).
There have also been predictions that there is a “75% chance of the RBNZ reducing the rate by the end of this year” which can go one of two ways. The currency markets like certainty and a 75% chance suggests that investors are relatively sure that they can expect a rate drop, so people can prepare themselves before this alteration. Yet, at the same time an interest rate reduction can heavily influence how people will be managing their finances and may influence people to move their funds out of this commodity currency and into more stable currencies.
The main news for this week will of course be the interest rate decision as mentioned above, however, should Boris Johnson have any more misdemeanours involving domestic rows and the police, there could be movement for sterling exchange rates. These problems in his personal life may suggest to the public that he may not be a suitable candidate for the top job and could raise concerns over his ability to lead the UK out of the EU.
Additionally, the overarching issues that face the GBP/NZD rates are of course Brexit-related. The political landscape involving the pound lacks clarity regarding the direction and the progress of securing a trade deal, which makes investors feel unsure about what will happen in the future.
Unless a deal can be set underway in the lead up to October, the uncertainty will continue to weigh on GBP/NZD rates.
If you have any queries surrounding how this may affect your financial position, feel free to get in contact to see how we may be able to assist you.
Always a fast and efficient service, a good rate and a simple transfer.
Excellent customer service, very friendly and helpful staff. The process of money transfer is painless. Thank you.
The service was effortless to use and I was kept up to date all the way through the process with courtesy calls and advice from the same contact in the selling of my home abroad and returning the funds back to the UK. I would highly recommend this service to friends and colleagues in the future.
Efficient service and good rates. My currency reached my overseas bank same day!
I find the process to be efficient, uncomplicated, and very good value – the exchange rates used are unbeatable, and the fixed service charge is insignificant when sending a large-ish sum.