Expat Currency News – New Zealand dollar crumbles after surprise RBNZ rate cut
While the type of international money provider you use can impact the exchange rate you secure, with some currency brokers undercutting the rates offered by banks by up to 90 percent, picking the right time to move your money is also important. Having a little knowledge of how currencies are performing makes all the difference and our brief currency update gives you the information you need to make a move at the right time.
So, what happened last week?
A worse-than-expected raft of Chinese trade data prompted a resurgence in risk aversion, denting both the Australian and New Zealand dollars as concerns over the world’s second largest economy returned to the fore.
Improved UK industrial and manufacturing production figures helped to overshadow persistent ‘Brexit’ uncertainty and shore up the pound on Wednesday, with the outlook of the domestic economy appearing at least a little brighter.
Markets were also taken by surprise by the Reserve Bank of New Zealand’s (RBNZ) decision to cut interest rates, prompting a sharp decline in the New Zealand dollar. The euro, meanwhile, experienced violent fluctuations following the European Central Bank’s (ECBs) decision to cut the deposit rate and expand quantitative easing.
Pound to euro exchange rate: GBP/EUR ends the week higher, up from 1.2920 to 1.2954
If you had GBP 100,000 to transfer to Europe your money would have been worth EUR 129,200 at the start of the week but EUR 129,540 at the end, a difference of EUR 340.
Pound to US dollar exchange rate: GBP/USD ends the week lower, down from 1.4227 to 1.4209
If you had GBP 100,000 to transfer to the US your money would have been worth USD 142,270 at the beginning of the week but only USD 142,090 by the end, giving you USD 180 less.
Pound to Australian dollar exchange rate: GBP/AUD ends the week lower, down from 1.9128 to 1.8970
At the start of the week your GBP 100,000 would have been worth AUD 191,280 but AUD 189,700 at the end — netting you AUD 1,580 less.
Pound to New Zealand dollar exchange rate: GBP/NZD ends the week higher, up from 2.0865 to 2.1294
At the beginning of the week your GBP 100,000 would have been worth NZD 208,650 but by the end of you would have achieved NZD 212,940, leaving you with an extra NZD 4,290.
So, what can you expect in the week ahead?
The biggest data event for the pound in the coming week will be the Bank of England’s March interest rate decision.
Although policymakers are unlikely to take a more hawkish tone with regards to interest rates at this time the pound could still see some gains on the back of more optimistic comments on the UK’s inflation outlook and economic health.
However, if the central bank indicates a greater willingness to consider cutting interest rates in the near future the pound is likely to soften substantially against its rivals.
The latest Bank of England interest rates decision is due on Thursday 17 March at 12pm GMT.
Contributed by TorFX
TorFX is a specialist currency broker that offers far better exchange rates than you are likely to receive from a high street bank.