Pound to New Zealand Dollar rates have climbed over 1.4% this week, a majority of which can be attributed to the shock announcement when the countries’ Prime Minister unexpectedly resigned. When this was confirmed last week GBP/NZD rates climbed steeply as the uncertainty it created weakened the New Zealand Dollar. Bill English - his long-term deputy - has been confirmed to take his place.
The economy in New Zealand has been showing signs of improvements recently and there has been much said about the change in leadership as Bill English takes over as Prime Minister from John Key. Many think this change will be the best fit and as
such, we have seen markets settle back to similar levels before the announcement was made.
Yesterday evening New Zealand released their latest Business PMI data which showed a slight improvement strengthening the currency. Moving forward through the rest of the week however I think the price of the New Zealand dollar will be driven by the FED’s decision last night.
Overnight today we also have current accounts data released from New Zealand, this shows the amount of money that has flown into and out of the country’s economy so is a great sign of the well being of their economy. It is expected to show a fall and could weaken the New Zealand Dollar as a result of the recent political uncertainty, so I would expect the New Zealand Dollar to become cheaper to buy tomorrow.
Longer term even though there has been some positive post-referendum data from the UK I think most are aware that the data is starting to reflect the ‘storm’ coming to UK PLC. The Pound has generally been struggling against currencies from the other side of the world including the Australian Dollar and the New Zealand Dollar. I am of a view that this is likely to continue longer term into 2017 and I would not be surprised if we were to see GBP/NZD below 1.70 within the next month.
As a result these current levels, near the best in 30 days, still represents a good time to buy the New Zealand Dollar in my view.
If youd like to learn more about what impacts GBP/NZD exchange rates, or you have an upcoming transfer that needs attention, call our friendly team on 01494 725 353 or email me here and id be more than happy to assist you.
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