Currency - GBP / New Zealand Dollar

It is perhaps tempting fate to think it but the Pound might just have pushed the New Zealand Dollar to more attractive levels for those migrating to or importing from New Zealand. Last week's comments from the governor of the Reserve Bank of New Zealand opened a few eyes and made traders believe that the RBNZ is going to leave their base interest rate on hold for some time to come. If the RBNZ is happy with a brief spell of 5% inflation, there is no pressure on them to hike interest rates anytime this years and the higher yielding Australian Dollar will draw more funds from abroad, leaving the NZ Dollar to weaken in its wake. As you can see from the chart, the push above a trend line which has capped this pair for the last 12 months is a pretty significant event. Currently, the previous high level of roughly NZ$ 2.22 is still capping the market but a break of that resistance would open up a push to NZ$ 2.26 and perhaps, with a bit of luck and a fair wind, a rally to the top of the larger downtrend channel at NZ$ 2.36. I have my fingers firmly crossed for those in need of NZ Dollars in the longer term but short term buyers should be very wary of the effects of profit taking which could very easily undo all this good work.