GBPNZD rates have risen on the back of uncertainty over future prices of Milk, New Zealand’s main export. Sterling also found some favour towards the end of last week further helping the bounce. Personally I would be a little worried about just how much higher this will go and if I had New Zealand dollars to buy I would be looking to move sooner rather than later particularly with worries over the EU Referendum likely to further undermine the pound in the future. If we look a bit more carefully at the region then New Zealand could longer term come under further economic pressure, we could easily see the rate slip on the back of say worries over just what China will do next or what is happening in Australia. In fact recently the Australian and Chinese economies have been performing slightly better than expected which has helped explain the strengthening particularly on the Aussie. The difference between Australia and New Zealand is however that milk prices have slipped in the last few days and weeks which has seen the Kiwi slip presenting the much improved opportunities to buy the currency.
Longer term I think the pound will make gains against the Kiwi but this might not be for many months or even into next year. Big improvements hinge on the outcome of the EU Referendum and perhaps a further destabilisation in China. At present none of these outcomes looks clear cut and therefore firm predictions are difficult. It would appear the Brexit worries will be a big driver between now and June, if you have Kiwis to buy, taking advantage of any spike seems the better option to reduce the chances of you losing out from unexpected losses.
For more information on the latest trends and themes to move the market, including assistance with achieving the best exchange rate please contact me Jonathan on [email protected]