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Pound Hits 5-Week High Versus Kiwi, as NZ Business Confidence Falls

Market CommentaryPound Hits 5-Week High Versus Kiwi, as NZ Business Confidence Falls
Pound Hits 5-Week High Versus Kiwi, as NZ Business Confidence Falls
Image credit: Sam Savine.

Welcome to Pure FX's latest update of the pound to New Zealand dollar interbank exchange rate.

This tells you when it's an outstanding time to exchange pounds to New Zealand dollars, for your money transfer!

Sterling jumps versus the kiwi! The pound to New Zealand dollar interbank exchange rate has hit 1.9411 today, its highest in 5 weeks, or since May 20th.

The pound has climbed against the NZ dollar, because New Zealand's business confidence fell to a 7-month low in June, said a closely-watched survey today.

The kiwi dollar has weakened, because New Zealand business confidence fell to -30% this month, said ANZ Bank’s monthly business confidence survey on Wednesday.

This has dragged down the New Zealand dollar, because this is the lowest business confidence since November 2016, and well below May's result of -12%.

This business confidence data "suggests the economy may continue gently losing steam over coming months," says ANZ senior economist Liz Kendall, thus weighing on the kiwi.

The economy "continues to weaken. The economy is now clearly tracking around 2% and not 3%," according to Bagrie Economics economist Cameron Bagrie, so hurting the NZ dollar!

NZ Dollar Weakens, as Trump Trade War Weighs

What's more, the pound to New Zealand dollar interbank exchange rate has also reached this 5-week high, because US President Donald Trump's trade war continues to weigh on sentiment.

The New Zealand dollar has lost out, in particular because Mr. Trump threatened on Tuesday to impose new tariffs on European carmakers, once a US study on the sector is complete.

This follows Mr. Trump's recent threats to impose $200bn of tariffs on Chinese imports, and restrict foreign companies from buying US industrial firms, thus weakening the NZ dollar.

This has weighed on the kiwi dollar, first because the New Zealand dollar is a "commodity currency", so tends to weaken when global sentiment falls, and investors seek safe haven economies.

This has also dragged down the NZ dollar, because New Zealand is a small, open, export-orientated economy, so stands to lose out if Mr. Trump's trade war with the EU and China escalates.

As a result, the pound has reached this 5-week high versus the NZ dollar, and could rise higher, looking ahead!

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Please bear in mind, this article is Pure FX’s opinion only and does not constitute advice. Moreover, the exchange rates referred to in this article are the interbank rates, which are the rates at which banks and financial institutions buy and sell currency to each other. Therefore these exchange rates cannot be accessed by individuals or SMEs, and are not the same rates that Pure FX can offer. To get a free exchange rate quote, call us on +44 (0) 1494 671800, or email peter.lavelle@purefx.co.uk.

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