NZD Exchange Rate
Ahh, New Zealand: The first country to give women the right to vote (1893) and also the first country to charge $1,000/kg for honey.
What influences the NZD/GBP exchange rate?
As a commodity currency, the New Zealand dollar (or Kiwi) can depend heavily on the price of milk due to New Zealand’s reliance on its dairy industry for 30% of all exports.2
Both the GBP and the NZD currencies trade most actively against the U.S. dollar, and the relative strength of the U.S. economy may play a role in the GBP/NZD exchange rate. China is a major export partner for New Zealand, therefore any economic slowing or growth that impacts commodities destined for China may also influence the GBP/NZD exchange rate. In contrast, the U.K. exports primarily to the U.S. and continental Europe. Any policy changes regarding how the U.K. trades with Europe may also influence the GBP/NZD rate.
The islands of New Zealand are actually the peaks of the 93% submerged continent Zealandia.
In terms of area, New Zealand and the U.K. are of a similar size, but the U.K. has a population 14 times larger than New Zealand, and a GDP 16 times larger.3
New Zealand is home to one of the world’s largest insects, the giant weta. It’s name comes from the Maori word ‘wetapunga’ meaning the ‘God of ugly things’.4 Fortunately, we don’t have those in the U.K.
Kiwifruit exports were worth NZ$1 billion dollars in 2014 and accounted for approximately 42% of New Zealand’s horticulture exports.5
For a more general discussion about exchange rate forecasting and macroeconomic factors to consider, check out this article.
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