The pound has slipped against the New Zealand dollar this week with rates trading at just over 1.70 for this pair. GBP NZD has slipped may have further to fall as the New Zealand dollar is still popular with investors as a commodity currency. The recent rise in commodity prices and oil is also helping boost the kiwi.
This Thursday sees the Bank of England Quarterly inflation report and interest rate decision. Although no change in interest rates is expected the pound could see additional volatility from any comments from Bank of England governor Mark Carney.
The inflation report is hugely important as inflation has just started to climb higher and there is an expectation that it will move even higher in the coming months largely as a result of the recent weakness in the pound which has made imports more expensive but also due to the rising price of oil.
Those clients looking to buy New Zealand dollars may see a short term jump higher although the overall Brexit uncertainty is likely to keep any gains contained. A bill is about to go through Parliament which will allow Article 50 to be invoked and this clarity could also lend some support to sterling.
Politics in my view continues to be the single biggest driver for sterling exchange rates and this is unlikely to change any time soon. The Brexit negotiations are likely to draw out for a period of up to two years and possibly longer so the volatility is likely to continue for some time.
Those clients with a requirement to either buy New Zealand dollars or sell New Zealand dollars would be wise to get in touch to consider your options as there is a huge amount of news expected politically in the coming days and weeks.
If you would like further information on sterling exchange rates and to discuss how we can assist then please feel free to contact me on 0044 1494 787 478 and ask one of the team for James. Alternatively, I can be emailed directly on [email protected]