The Pound to New Zealand Dollar exchange rate remained at a historic high of 1.88 at the end of Friday’s trading session, with Sterling rallying by 0.7%.
(First published 10:22, April 28th, 2017)
GBP NZD has ended trading on Friday at a high of 1.88, the best exchange rate since July 2016.
Sterling could fall from its best exchange rates in the future, however, depending on who wins the June UK election.
Current polls put the odds of a Conservative victory between 45-47%, compared to Labour’s chances of 26-29%. These are only estimates – the EU Referendum and US Presidential election votes have shown that polls aren’t infallible.
If Theresa May does clinch victory in June, the Conservatives are expected to be hold a greater majority in the House of Commons.
According to May;
‘Every vote for the Conservatives will make it harder for opposition politicians…to stop me from getting the job done. Every vote…will make me stronger when I negotiate for Britain with [leaders] of the European Union. Every vote…means we can stick to our plan for a stronger Britain and take the right long-term decisions for a more secure future’.
Whether this plan for a ‘stronger Britain’ includes the ‘no deal is better than a bad deal’ plan remains to be seen.
May has previously hinted at the possibility of going for an economically turbulent ‘hard Brexit’, with the UK rescinding access to the single market.
If it looks like May’s Brexit stance is for a quick and messy exit, then the Pound could tumble against the New Zealand Dollar.
If the PM conversely aims for what is dubbed a ‘smooth Brexit’, then the GBP NZD exchange rate may appreciate. This alternative would keep UK ties to more EU institutions, but potentially forfeit the enhanced immigration controls demanded by a portion of ‘Leave’ voters.
An ongoing issue that might impact the New Zealand Dollar, meanwhile, is the state of migration in the country.
Recent net figures have shown 71,900 more people entering New Zealand than leaving it for long-term stays. This has sparked intense debates among politicians, who have blamed higher migration on straining education, healthcare and transport sectors. Statisticians have been poring over figures to see if there are negative impacts from an influx of migrants to the country.
Looking ahead, if the news leads to knee-jerk migration controls by officials, then the New Zealand Dollar could weaken due to potentially reduced spending and employment in the country.
Recent Interbank GBP NZD Exchange Rates
At the time of writing, the Pound to New Zealand Dollar (GBP NZD) exchange rate was trading up at 1.88 and the New Zealand Dollar to Pound (NZD GBP) exchange rate was trading down at 0.53.
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