Clients looking at a prospective GBP/NZD currency exchange will have witnessed the Pound decline over recent weeks, with Sterling dropping almost seven cents in the past month.
GBP/NZD rates were creeping close to 1.90 only recently but are now trading below 1.82, proving how fragile the UK economy remains in the eyes of investors.
Clients holding Sterling will now be concerned that its value will decrease further and although I expect it to find support above 1.80, I’m not convinced we will see a major upturn or sustainable improvement over the coming days.
Much of the market focus has now turned to the upcoming UK general election and it’s the recent polls, indicating a surge in support for the Labour party, which has contributed to the Pound’s decline.
The markets had factored in a Conservative majority to such an extent that any indication that this was not going to be the final outcome, has caused investors to panic and sell off their GBP positions. This in turn has caused the Pound to weaken and the NZD has benefited as a result.
This means that clients holding the Pound could be susceptible to further losses, should the expected result be questioned further and that is why I would be looking to protect myself from further losses.
It would be wise to take head of last year’s key political decisions, which remind us that the expected results should never be taken for granted.
Looking at the NZD and it seems to have been inadvertently boosted by the Pounds woes. With concerns surrounding the US economy and how the ongoing sage surrounding President Trump will play out, investors risk appetite could well diminish. This would usually hurt commodity based currencies such as the NZD, so it may be wise for clients to take advantage of the recent improvement and remove any market risk.
If you have an upcoming GBP or NZD currency transfer to make 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 Matt.