The New Zealand dollar continues to see a volatile period with much uncertainty at present for the commodity currencies. GBP NZD hit a high of 1.9111 earlier today and there now appears to be support at the 1.90 level. There is currently a good buying opportunity for those clients looking to buy New Zealand dollars with pounds and much of the market movement has arisen from the financial uncertainty that the world has seen in the last fortnight. The stock market sharp drop that was seen in the US just over a week ago has seen a correction in many of the financial markets and both the Aussie and Kiwi are suffering as a result. The commodity currencies are seeing a weakening as funds are being pulled away from the riskier currencies. This has helped strengthen the US dollar as a result and rates for NZD USD have weakened further.
UK inflation data today arrived slightly stronger than expected and held steady at 3% which helped see a small boost for the pound. However the flip side to this is that it means that peoples spending power is being curtailed by higher inflation and this of concern to the financial markets. Higher global inflation is generally bad news for the kiwi dollar and so there may still be some more room in this rally for GBP NZD.
Clients looking to buy New Zealand dollars should pay particular attention to what is happening in the UK political arena. Foreign secretary Boris Johnson will be making a Valentine’s Day speech tomorrow in the first of a number of big speeches from British cabinet ministers. UK Prime Minister Theresa May is expected to be speaking on Saturday and any developments here which signal the future path to Brexit are likely to have a considerable impact on sterling exchange rates.
For more information on the New Zealand dollar and to discuss how your own requirement may be impacted by these events then please get in touch with me James at [email protected]