Despite an encouraging rise in consumer confidence and healthy migration figures, the New Zealand dollar continued its fall against its major currency counterparts, namely the Pound, with GBP/NZD currently sitting at near 5-month highs for those looking to buy New Zealand Dollars with Sterling. In the table below you’ll see high to low GBP/NZD exchange rate movement when exchanging £200,000 to NZ Dollars during the last 10 days.
|Currency Pair||% Change||Difference on £200,000|
Indeed, credit card spending jumped by 7.2% for the month of March (YoY) earlier this week which would have been well received by the New Zealand Reserve Bank. More interestingly, the continued strength from Tuesday’s migration figures (44,500 more visitors in March) should well have sparked some interest from investors, given New Zealand’s Tourism sector accounts for just under 400,000 Kiwi jobs and 20.7% of New Zealand’s foreign exchange earnings.
For me, there is a good chance these positive releases have been outweighed by the lack of investor appetite for the riskier commodity-based currencies like the New Zealand Dollar at present. The markets may well have already factored in positive inflation data from the US due out early Friday afternoon, which might prompt an even more attractive stance by the Federal Reserve regarding their path for raising interest rates state side.
This all leaves those looking to buy New Zealand Dollars with pounds with an excellent opportunity to maximise their returns, having already gained 1.5% since Monday, equating to an extra $6,000 on a £200,000 transfer. It may pay to make a move before Friday just in case those US CPI figures come out weaker than expected and sterling’s impressive gains are reversed.
There may well be some scope for New Zealand Dollar holders to finish on a high, with key international trade data due out later on this evening holding particular relevance at present.
With the market’s still wary of the on-going threat of trade wars and protectionist stances limiting international growth, investors have been pinning many of the commodity-based currencies’ value to their ability to maintain a competitive status on the international stage. A pick up in exports due to increased demand for Kiwi’s dairy products is expected to drop New Zealand’s trade balance deficit down to $-2.9B. If this is further bolstered by the positive migration figures as previously mentioned in the report we could well see a brief spike for Kiwi holders. Given the release is out of trading hours, it may pay to discuss the option of limit orders with your account manager here at FCD.
For more information on how future data releases could affect your currency requirement, call our trading floor on 01494 725 353.