Getting the best exchange rate can be achieved by understanding what is driving rates and the service of a specialist currency broker. Below are movements in just a month affecting New Zealand Dollar rates when buying £200,000:
|Currency Pair||% Change||Difference on £200,000|
This week the latest report from the New Zealand Institute of Economic Research revealed that business confidence has fallen once again for the second quarter in a row, this is the first time in more than 2 years.
The fall has been put down to the election result which saw the Labour party return to power possibly taking the focus away from Business.
There were also concerns that fewer firms were planning to invest this year, suggesting there could be slower growth.
Inflation in New Zealand is currently at 1.9% which is right in the middle of the Reserve Bank of New Zealand’s mandate. There isn’t much expectation that there will be a rate hike in the short term with some analysts expecting any rate movements to be several years away.
Over the start of 2018 Sterling has made inroads against the New Zealand Dollar with anyone looking to purchase $200,000 NZD currently paying £2,500 less than earlier in the year.
The Reserve Bank of New Zealand at the end of last year raised concerns with regards to the strength of the New Zealand Dollar as they weren’t in control of the strength of the currency, due to it largely being dictated by commodity prices. However, the appetite to risk has increased as the expected 4% global growth has opened up other avenues for investors. Therefore the 1.5% interest rate returns available in the New Zealand Dollar are no longer considered as rewarding enough and as a result investors have looked for returns in less volatile currencies.
I would expect this process to continue over the next few months especially as stock markets globally continue to the grow. The NZD could be one of the biggest losers having been one of the main gainers in the past year, which might help the Reserve Bank make a decision moving forwards regarding interest rates. Make sure you contact your broker to discuss the options available to you.
For more information on how future data releases could affect your NZD requirement, call our trading floor on 01494 725 353 or email me here.