As The markets continue to digest the results of the New Zealand general election over the weekend, the Pound continues to find support against the NZD.
The result ended in a stalemate as neither the current Conservative government, led by Prime Minister Bill English, or Jacinda Ardern’s led Labour party gained the required seats for a majority.
This result echoed those in Germany, where Chancellor Angela Merkel also failed in her bid for a majority vote and, following a similar scenario in the UK, the political tides across the globe seem to be changing.
GBP/NZD rates moved back through hit a high of 1.87 overnight, before retracting to under 1.86 this morning. The Pound’s value has been inadvertently boosted by the political vacuum the result has created, with the markets unclear as to which government will be in place for the coming years.
Despite current PM Bill English remaining upbeat, it is unclear which of the main parties will be able to form the vital coalition to take power and as such investors have pulled funds away from the NZD, weakening its value as a result.
English’s National party took 58 seats, whilst the Labour party, led by Jacinda Ardern took 45 seats. These were both short of the 61 seats needed to from a government and the key could now be held by the unpopular socialist Winston Peters. The unpredictable politician won 9 seats and it is he who could well have the final say, in determining which party will form a working government for the coming years.
With his policies, seemingly more aligned to Labour, Ardern could be in the driving seat, despite winning less of the public votes.
However, Peter’s has now said he will not make a decision until October in terms of which alliance he will help form and a such the current market uncertainty is likely to continue over the next few weeks.
This uncertainty could lead to further pressure on the NZD, with New Zealand’s export driven economy already facing a slowdown due to a drop in demand for their high yielding dairy produce.
If you have an upcoming NZD currency transfer to make you can contact me directly on 01494 787 478. We can help guide you through this turbulent market and as a company we have over eighteen years’ experience, in helping our clients achieve the very best exchange rates on any given market.
Our award inning rates can be accessed very easily over the phone and I can keep you posted with key market developments ahead of any prospective exchange you need to make.
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