Data for New Zealand is light this week with just inflation expectations and labour data on Tuesday. However what happens in Australia tomorrow could have some implications for the kiwi. The Reserve bank of Australia hold a key interest rate decision on Tuesday where it is possible there will be an interest rate cut.
This week it is a particularly close call as to whether or not they cut and there is likely to be considerable volatility for the Aussie dollar. The New Zealand dollar could be affected though as New Zealand are also in the midst of a cycle of interest rate cutting and a move by Australia is likely to see New Zealand follow suit. This would have the effect of seeing the New Zealand dollar weaken if the Reserve Bank of New Zealand is to embark on another interest rate cut.
For anyone buying New Zealand dollars it may be prudent to look at securing before Thursday ahead of the Bank of England meeting. An interest rate cut in the UK is widely expected this week and there may also be some other stimulus offered as well such as Quantitative Easing (QE) which would be negative for the pound. Clients selling New Zealand dollars may wish to wait for the UK outcome.
There is a huge amount of global interest in this particular meeting following Britain’s decision to withdraw from the EU. Much of this rate cut should be priced into the market but the pound could still slide lower. What will be interesting is whether any QE is offered as this in my view would see the pound weaken quite quickly.
If you have an upcoming GBP or NZD currency requirement and would like to be kept up to date with all the latest market movements, or simply wish to compare our award winning exchange rates with your current provider, 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]