Tag Archives: GBP NZD exhcnage rates
New Zealand Prime Minister talks the Kiwi Dollar lower.
Sterling exchange rates have strengthened by over 0.5% this morning against the Kiwi Dollar as last night the New Zealand Prime Minister John Key tried to talk the currency lower yesterday by calling the NZD overvalued even as the country’s economic growth looks set to outpace the UK, EU, and theUS this year.
Key stated “we’re considering what we can do to resist a rising exchange rate” and “kiwi strength was the result of weakness in US and European economies.” The pound is currently down around 3% this year against the Kiwi and the strong economy in New Zealand is meaning that the Reserve Bank of New Zealand are finding it difficult to raise interest rates as this would strengthen the currency even further.
New Zealand have set their interest rates at a low of 2.5% For those of you that require buying NZD if an unlikely rate hike occurs we may see the KIWI continue its run on the pound. At some point New Zealand will probably raise rates this year. If you are holding out for levels of 2.0 or above you may want to move your target level as sterling has been as low as 1.84 this year. Make sure that you are in a position to be able to move on your funds should a movement be favourable before this occurs. If you require buying or selling the KIWI Dollar then please feel free to contact me at bma@currencies.co.uk and we can discuss all the options that may be suited to your situation. You can even call me on 01494 787 478 if you would like to discuss things in more detail. Just ask for Ben Amrany
Southern Hemisphere Currency Warning!!!
We have seen a decent spike for the pound over the last week or so against the southern hemisphere currencies. This morning sterling exchange rates are trading up at 1.5855 against the Aussie Dollar, 2.0960 against the Kiwi Dollar and 13.00 against the South African Rand.
However clients who need to buy AUD, NZD or ZAR need to be acutely aware of how the problems in the Eurozone are affecting your exchange rates.
Traditionally the higher rates of interest offered in these countries means that investors who are getting a poor return on their savings in areas such as the UK, the Eurozone and even the US buy significant volumes with the aim of holding them and benefiting from the greater interest paid out (known as carry trading) – supply and demand means that the more people looking to buy a currency the more expensive it gets – a trend we have seen since the financial crisis began 3 years ago and worldwide interest rates were slashed.
This trend is reversed when we see major political or economic upheaval as investors sell their Southern Hemisphere Currencies and repatriate their funds for a short period of time until things “settle down again” – this causes a huge drop in demand and we get an exchange rate spike such as we saw in the middle of August, the end of September and during November so far.
With Greece, Italy and Spain putting new Governments in place over the last week and things are again “settling down” I would expect to see demand for these high yielding currencies go up and hence exchange rates for sterling weaken slightly. Now by no means is this a science and there a huge number of other contributing factors but this is a pattern that we have seen time and time again – If you have a need for any of these currencies now may be a key time to secure your funds either on a spot or forward contract. Make sure you keep me aware on bma@currencies.co.uk so I can continue to act as your eyes and ears into the world’s most volatile market. Let me know what your requirement is and we can assess the markets and decide when may be a key time to secure your currency.
Contrasting week for the pound. Gains against the US Dollar but major losses against the AUD, NZD and EUR
Sterling exchange rates have had a very contrasting week against a range of currencies mainly driven by events in the Euro Zone. The pound has strengthened by around 4 cents against the USD reaching a one month high today of 1.5796. But against the Euro we have witnessed the pound lose 3.5 cents in a week or so and against the southern hemisphere currencies the pound has been hit the hardest. GBP/AUD has lost close to 7 cents and GBP/NZD around 4 cents.
The main reasons for this large movement seems to be all in connection with the sovereign debt crisis of Europe. With G20 finance ministers and central bankers meeting in Paris to discuss the euro zone’s crisis things have calmed down of late. All members of the Euro zone have now agreed to the EFSF (European financial stability fund) and confidence from investors has started to return to the market.
What we had seen of late was a massive swing back in favour of the USD. Every time there is uncertainty in global financial markets investors will move into the USD as a safe haven. This caused the pound to weaken from highs of 1.65 down to 1.53 since late August. Then once confidence returned to the markets this week it seems that investors have been selling their positions of USD and moving back into riskier currencies like the Aussie & kiwi Dollar. This has weakened the USD immensely against a basket of currencies and assisted in sterling exchange rates losing huge amounts over the course of this week against the AUD & NZD. So it now seems that the stronger currencies like the Aussie, Kiwi & Euro have benefitted from events in Europe but the pound is still weakening.
Now for all my clients who I assist make savings on their exchanges on a daily basis, they always want the market to be as high as possible. It is human nature to want to get the most for your funds (Let’s face it that is why you are reading this site and not just blindly using your bank) However it is important to base your decision on sound information and data that effects your currency exchange.
A client of mine recently watched the GBP/EUR rate jump from 1.13+ in September all the way to 1.17+ two weeks ago. We discussed their options and explained that they could forward buy their Euros at the current high point. Unfortunately human nature kicked in and they wanted to see if the market went higher. They had to complete on their exchange this week and traded at 3 cents lower. That decision cost them close to £6000 more this week than when we discussed the forward option.
Sadly wishing and hoping the market up will not affect exchange rates so make sure you do not let your heart rule your head when good buying opportunities arise. If you see the market spike in your favour why gamble with volatile markets and risk your requirement becoming more expensive. Please feel free to email me at bma@currencies.co.uk or call me on 01494 787474 and ask to speak with Ben. We will discuss your requirement and try to strategically asses the best time to do your conversion. Please quote the Pound Sterling forecast website when making contact so one of our experienced brokers can look after your important currency exchange.
KIWI Dollar goes from strength to strength
The pound has hit an all time low against the New Zealand Dollar falling below 2 Dollars to the pound. The rate actually hit a low of 1.9981 as the Kiwi Dollar seems to be strengthening against a host of currencies at present. The prospect of rate hikes, a growing economy, and higher commodity prices have led to calls from exporters for the MPC to weaken the currency.
The strength behind the Kiwi seems to be about strong New Zealand fundamentals at present and the improvement and resilience of the economy has been much better than you would have been expected a month or two after the (February 22) earthquake.
New Zealand have had a stream of bullish economic data recently and yesterday’s merchandise trade data, which showed a surplus of $1.1 billion in April, the highest monthly surplus on record. It has helped the Kiwi to strengthen by nearly 15% against the USD this year.
So looking forward for anyone with a requirement to buy NZD over the coming months the forecast does not paint a pretty picture with potential future interest rate hikes in New Zealand. If however you are looking at moving a lump sum back to the UK, US or Australia then now could not be a better time. If you would like assistance in getting more for your money when making your money transfer then please feel free to contact me on bma@currencies.co.uk and I can explain the mechanics of trading with us and we can have a chat about potential future movements for any currency pairing.
