The New Zealand Dollar has come under pressure over the last week as fears of a trade war have been mounting after the US President Donald Trump has signalled his intentions to put up trade tariffs on imported steel. The kiwi has been negatively impacted by such developments although some degree of calm is returning to the markets which has seen the New Zealand dollar rally.
It has been reported that some US lawmakers have requested that the President gives the matter more though to avoid and long term negative impact on future trade. The kiwi is likely to see a lot more volatility on the back of this story as will the Australian and Canadian dollars. Any disruption to future trade impacts negatively on these currencies.
Selling New Zealand Dollars?
Those clients looking to sell New Zealand dollars for pounds have been feeling the pressure of late with the rise of sterling against the kiwi. Rates for GBP NZD broker over 1.92 for the pair last week creating a good opportunity for those clients looking to buy New Zealand dollars. Ongoing Brexit negotiations between Britain and the EU will almost certainly have a direct impact on the price of sterling in these coming weeks and months.
A response from the EU to UK Prime Minister Theresa May’s speech is to be expected in the coming days and any frosty feedback could see the pound come under substantial pressure. There could be some short term opportunities for selling New Zealand dollars as the thorny trade discussions commence at the end of March and clients would be wise to be ready to take action when there is market movement. Longer term and the pound has the potential to rally considerably on the back of a trade deal that works for both Britain and the EU which in my view should be the favoured option from both sides. Rates for BP NZD may be above 1.90 at the moment but that could rally to 2 dollars with relative ease.
For more information on the New Zealand dollar and how to maximise on the rates of exchange as they become available then feel free to email me at [email protected]