We have seen another slight drop in value for the New Zealand Dollar following much worse than expected milk product prices in the latest dairy auction. Prices had been expected to rise, however the markets saw a fall of 0.8%which led to a drop in value for the Kiwi.
Dairy products are New Zealand’s largest export so these auctions are extremely important for the New Zealand Dollar and can lead to gains or losses depending on the result that is seen.
Thursday morning (Wednesday night in the U.K) will see the release of the latest interest rate decision from the RBNZ (Reserve Bank of New Zealand) and expectations are for no changes to interest rates, so any changes may lead to a sharp movement for the New Zealand Dollar.
Interest rates are key for the value of a currency and generally a hike in interest rates is seen as a positive thing due to the currency being made more attractive to investors. Equally a cut is viewed as negative due to making the currency less attractive.
Along with the interest rate announcement the RBNZ will also release their interest rate statement, this will give guidance on how they came to their decision and what their plans may be going forward. Again any hint to a rate hike may be seen as positive and hint towards cuts could lead to a drop off in the value of the NZD.
With the U.S slowly increasing their rates we are starting to see a little pressure on the NZD as with the U.S rates creeping up closer top that of New Zealand investors are starting to shift money over to the perceived ‘safer’ USD.
If you are in the position where you may need to carry out an exchange involving the New Zealand Dollar then I will be able to help you. Not only do we provide market information but we can also assist in large currency exchanges at market leading exchange rates too.
If you would like my assistance both with the timing and purchase of your currency then feel free to email me (Daniel Wright) on [email protected] and I will be more than happy to get in contact with you personally.