The New Zealand dollar has been supported with a rise in dairy prices at the latest Global Dairy Trade auction which saw prices rally 1.1%. It was only two weeks ago when prices had fallen by 1.1%. The dairy industry will be hoping for a weaker New Zealand dollar which will help cash flows and help boost the economy. With interest rates in the US climbing higher whilst staying still in New Zealand there is every chance the New Zealand dollar may have further to fall.
The New Zealand dollar continues to see a volatile journey much of which is stemming from uncertainty over a potential trade war between the US and China. The New Zealand dollar has been negatively impacted by recent global events and the latest developments after the US pulled out of the Iran nuclear deal are creating geopolitical tensions which are also negative for the kiwi.
Finance Minister Grant Robertson will deliver the annual budget statement tomorrow. The budget from the treasury will cover all sectors in the economy and should indicate the direction that Prime Minister Jacinda Ardern wishes to follow. Expect high volatility for New Zealand dollar exchange rates following the statement as to be expected on budget day. Any big changes are likely to have a knock on effect on the New Zealand dollar. Data from New Zealand for the rest of the week is light and focus now looks to New Zealand retail sales data on Sunday evening (GMT).
Rates for GBB NZD have broken over 1.96 again creating an excellent opportunity to buy New Zealand dollars. With an uncertain global outlook and the decision to keep interest rates on hold in New Zealand the pound could rally higher with 2 dollars firmly in sight.
For more information on the New Zealand dollar and assistance in making transfers at the best rates of exchange then please get in touch with me at [email protected]