So for instance, if you look at the pound to New Zealand dollar exchange rate today, it’s at its highest point in six weeks at 1.9754. It hasn’t been this high since mid-July. That makes it a good time to buy New Zealand dollars.
Of course, if you have time to wait before you change currencies, you may choose to do that too. If you go back to May 2012 for instance, the pound was even higher against the New Zealand dollar at 2.0732. That was the pound’s highest rate against the kiwi since November 2011.
Hence, though it’s by no means guaranteed, if you decide to wait the New Zealand exchange rate may move even further in your favour. (Of course, it may not, in which case if you wait you may lose out. This is the essential risk involved in trying to get the best exchange rate.)
If you want to maximise your New Zealand dollar exchange rate, you might like to know when the kiwi dollar is set to change.
This is likely to happen when economic data related to New Zealand is released. For example, if New Zealand releases impressive unemployment data, signalling that total joblessness has fallen in the last three months, the New Zealand dollar will likely gain.
This is because it sends a strong signal that New Zealand’s economy is on the right track, encouraging investment in the country and demand for New Zealand dollars.
Similarly, if something negative happens in the country, such as the earthquake in Christchurch last year, the currency will lose out.
In addition, the New Zealand dollar is affected by what happens elsewhere in the world. It’s especially tied to Australia, both because Australia is the country’s biggest trading partner and its closest cousin.
Hence, if bad economics news hits Australia, such as the recent ill omens about its mining boom, that can drag the New Zealand dollar down with it.
Now you know both when is the best time to buy New Zealand dollars, and what affects the kiwi currency, you’re in a much stronger position to plan your currency transfers.
It means you can look ahead at what’s likely to affect the exchange rates, and so decide whether the current exchange rate is right for you, or if you want to wait and see if it gains.
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