The New Zealand Dollar has gone from strength to strength recently as demand for the high yielding currency ramps up.
The currency has an advantage over most if not all other major currencies in the current climate, as the base rate of 2.00% is a steep improvement on the interest rates offered by other major economies such as the UK’s 0.25% and the 0.5% offered over in the states.
To add to the this NZD strength the Pound has also been coming under pressure of it’s own which is why we’re once witnessing the GBP/NZD exchange rates return to the immediate post-brexit vote levels.
The Pound has been under pressure since the beginning of last week when inflation figures came out below expectations, even if only just. Then at the end of last week Boris Johnson contributed to the Pounds weakening value after suggesting that the UK will begin the process of separating from the EU in the early months of next year.
Because there is a lack of economic data out this week from the UK the Pound’s value is being driven by sentiment. It has moved upward slightly since the beginning of the week as after a sell-off there has been the inevitable uplift as day traders attempt to pick up the pond on the cheap and personally, I don’t expect it to last long and I expect the GBP/NZD rate to continue to weaken until the Reserve Bank of New Zealand cut interest rates.
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