The pound has fallen to a 1 week low against the New Zealand dollar although there has been little market volatility seen today. Sterling exchange rates continue to be driven by UK politics and March 9th is firmly being discussed as the date that everything will be set up in place ready to invoke Article 50. GBP NZD is now sitting at just over 1.70 for this pair, just a fraction higher above the lows at the start of the year. It also takes GBP NZD to lows which are beyond 10 years.
As such there is an excellent opportunity for anyone needing to sell New Zealand dollars. As we approach Brexit over the coming weeks there is likely to be considerable volatility for this pair. This is the single biggest driving force for sterling exchange rates and there is the potential for a steep fall, in the short term anyway.
Overnight sees the Reserve Bank of New Zealand inflation expectations which could create some volatility for the New Zealand dollar. Any increase in inflation going forward could see the dollar strengthen beyond these levels as it could put pressure on the central bank to take action and eventually raise interest rates.
Data is light for the UK this week with just house price data released on Tuesday morning which could give some clues as to how well the UK housing market is performing. Friday however is more important with UK manufacturing and industrial production numbers as well as trade balance data which may give some indication of how well the UK is faring
If you would like further information on sterling or New Zealand dollar 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]