The NZD has found support under 1.75 against the Pound over the past week but is still struggling to make a sustained move, despite the growing fears surrounding the UK’s Brexit.
This is quite poignant in my opinion, as the Pound has suffered against most of the major currencies of late, as discussed earlier in this report.
Any clients holding NZD should be keeping a close eye on tomorrow’s budget, as any indication of increased future economic growth could drive GBP/NZD through 1.75, which has become a key resistance level for the pair.
However, I do not expect one way traffic, even if UK Chancellor Philip Hammond is bullish in his budget statement. The markets are seemingly becoming increasingly concerned about Brexit and assuming the triggering of Article 50 goes ahead as expected this month, I cannot foresee a sustained run for Sterling through this period.
The current market remains unpredictable at best and with global investor confidence fragile, commodity based currencies such as the NZD are always at risk. They are reliant on global growth, in New Zealand’s case particularly the export of their dairy products. Therefore any slowdown in this sector will always hit their economy hard and the NZD will inevitably suffer as a result.
Market uncertainty is a currencies undoing and with so many unanswered questions about the UK will facilitate its upcoming exit from the EU, are you prepared to gamble on a major improvement for the NZD? We also need to consider the knock on effect for the Eurozone, with questions being asked about how they will move forward as a single entity, with so much political and economic pressure building across the region.
This leads me to the conclusion that clients should be looking for short-term market gains rather than hold out for sustainable improvement in such uncertain times.
If you have an upcoming GBP or NZD currency transfer to make, then we can help you navigate this turbulent market by keeping clients up to speed with all the latest developments regarding Brexit and beyond.
If you would like us to monitor the market for you ahead of a currency exchange, or simply wish to compare our award winning exchange rates with your current provider, then please feel free to contact me directly on 0044 1494 787 478 and ask one of the team for Matt.
Alternatively, I can be emailed directly on [email protected].