GBP NZD Long Term

Does anyone have a view of the long term direction of the GBP/NZD?

I've recently moved back from the UK and decided to leave my money there in May hoping to get a better exchange rate. Since then I'm down about 60k NZD and really beginning to wonder :)

While the NZD is strong against the USD and GBP is relatively weak historically. The GBP doesn't seem to be strengthening much. So is the NZD likely to weaken any time soon? (rather than the USD strengthen)

i have recently dredged up some old gbp to build a house. my timing could not have been worse. suffice it to say, my money is still in gbp.
at about mid october, our dollar was the highest it has ever been on the gbp since it floated. this is an extreme end of the spectrum of gbp/nzd rates. if you look at a daily chart and go back as far as you can you will see this. a quick easy way of doing this is to go to this link, you will see it at a glance. http://www.nationalbank.co.nz/econom...ge/nzdgbp.aspx
my effort was in mid october.
what i am looking for is a reversion to the mean(about 36p) with a bit of overshoot so i can get a car as well(maybe 32p ish). remember earlier in the year we were at those sort of levels.
i believe that this is on the cards during 2010 if the expected w shaped recovery pans out. we have yet to do the second leg of this recovery. there will be a 'flight to safety' which should(hopefully) over ride our higher interest rates. flight to safety means people buy big currencies like japenese yen, usd, gbp etc.
hopefully we have seen trend change with a series of higher highs/higher lows since mid october. this seems to coincide with uncertainty in the continuation of this leg og the recovery.
as i type, (2:25, 30 nov 2009) gbp/nzd is dropping like a stone, i hope i am right.
any one who knows more about this than i do, please feel free to refute.
i do think that mean reversion and flight to safety are two powerful arguments for a decline in our dollar vs gbp.
if all is well in the world and interest rates prevail, i get 1/2 a house and no car.

Hope so , most my income is in pounds , have just been letting them accumulate and am living off my NZ money.

Loathe to exchange for NZ at anything over 40c

They say that the UK economy will be one of the last to recover, so any significant FX movement may still be a while away before it kicks in...

Yeah, as someone with 5 years savings in GBP, I'm watching the NZD/GBP cross closely.

Hard to imagine anything that is going to drive up sterling in the short term, but the market is full of surprises. Labour's out next year, so that's got to be a good start.

From "Top Ten investment tips for 2010 from Goldman Sachs"...

"Long Sterling (against the Kiwi dollar of all things): Actually, that
is a great idea – the pound and the kiwi are massively misaligned by
historical measures. GS says New Zealand’s central bank will raise rates
more slowly than markets think. The Bank of England will tighten more,
by 300 basis points by late 2011."

http://tinyurl.com/ygc3y5m

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Originally Posted by ruethewhirl

From "Top Ten investment tips for 2010 from Goldman Sachs"...

"Long Sterling (against the Kiwi dollar of all things): Actually, that
is a great idea – the pound and the kiwi are massively misaligned by
historical measures. GS says New Zealand’s central bank will raise rates
more slowly than markets think. The Bank of England will tighten more,
by 300 basis points by late 2011."

http://tinyurl.com/ygc3y5m

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Although I agree the Kiwi has massively appreciated against the pound as have the other commodity currencies so pound could be due a bouce. I disagree (yes thats right disagree with Goldman Sachs) with some of the reasoning behind this.

Public debt in Britain will reach 90pc of GDP by 2011 and rates agencies including Fitch have given indications that they will cut British debt froms it higly valued AAA rating if no clear method is given how the public debt will be tackled, and so far neither party has really come up with anything substantive.
In this election year I also find it highly unlikely that both monetary and fiscal policy will be strongly tightend at the same time and the direction has been leaning towards cutting spending and raising taxes to tackle debt. If British debt becomes garbage so does the pound, inflation is also not that much of a concern so rates do not have to be hiked in that respect with alot of market commentary (Ambose evans Pritchard himself) focusing on deflation being more likely.

And from what I read it seemed Bollard indicated he was going to raise interest rates sooner rather than later, possibly even march this year although there isn't much cause to worry about inflation in NZ at this point either really.

http://www.bloomberg.com/apps/news?p...d=aDRT5YUKjTu4

Too much pessimism built into the pound IMHO. Which paper currency is the least worst? Seems like GBP could be a likely candidate for that dubious honour as more bad news coming out of Europe lately.

my thoughts on GBP-NZD fwiw - incomplete count but you get the idea. Due a bounce.

http://i49.tinypic.com/2mwuikw.jpg

Great chart, Edwood!

The original question concerned the long term direction of the GBP/NZD. To give a view on that, one needs a view on the long term prospects for the British and NZ economies.

Too hard for me!

;)

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Originally Posted by macduffy

Great chart, Edwood!

The original question concerned the long term direction of the GBP/NZD. To give a view on that, one needs a view on the long term prospects for the British and NZ economies.

Too hard for me!

;)

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hey MacDuffy - cheers
yeah I couldn't see an 'active trades' thread for GBP-NZD? Hoep you don't mind if I post shorter term stuff here...

To answer the original question >> you'd have to think there will some reversion to mean in future. GBP has been oversold in my mind, kiwi (and AUD for that matter) have benefited and at some point GBP will come back to life. Exactly when that is - who knows?

I am in the double-dip camp at a macro level and expect we'll see another major sell off before too long (it may have already begun) and kiwi will get dumped in the process. But if the fundamentals in the UK don't improve then there's no reason for NZD to stay down for long.

A change of govt in the UK would be a great start! :)

kiwi caught a bid - if global markets play ball we may be back into the 2.22's. should be a good sell around there....

hi ed, heres my count, i reckon we should get a rally to around wave 4 area for a great short.

ending diagonal has broken out with a reverse head shoulders suggesting retracement

underway.

38.2 retracement nails the top of the 4th wave , so i will be waiting around 44.50 for a

reversal pattern.

http://iforce.co.nz/i/0awwe1ev.jpg

Hi DB

I have something similar

http://i45.tinypic.com/2iitvsw.gif

GBPNZD

http://i50.tinypic.com/30w83lw.gif

Hi Dumbass - got to your .382 - you in now or waiting? I'm wary of global indices continuing on higher and sucking GBP-NZD along for the ride so holding off for the moment

hi ed , this could be in for a good move south now as it counts best as third wave of a 3/C

had courage of my convictions and shorted after that double top , good result so far.

http://iforce.co.nz/i/o3m11ok5.jpg

reckon we could be looking at the move getting some traction now dumbass

coming back to the original question raised by AJ, here's a weekly view across 5 years. Potentially we're looking for a move now to the upper parallel of the main descending pitchfork (green). Has retested & found support at the median line, and has a clear path upward now within the ascending orange pf, initial target 2.44 area, the intersection with the blue pf.
Also we have a higher low which has been retested - now we just need sterling to grow some cojones!!

I'm long sterling now fwiw

Ed

http://i48.tinypic.com/biul55.jpg

it is looking really rubbishy now. we are close to the all time low(gbp/nzd, high for nzd/gbp) again. i am sick of it.

Now seems like the time to buy some GBP ? Am I wrong?

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Originally Posted by ENP

Now seems like the time to buy some GBP ? Am I wrong?

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There is some suggestion that the next set of economic data out of the UK may surprise to the upside, but it still won't be pretty. It may be enough to give the unloved GBP a boost though...

http://www.poundsterlinglive.com/aud...-aud-nzd-53545
Australian and NZ Dollar Forecasts Against the Pound (GBP) and US Dollar

Looking through this thread, everyone couldnt have got it more wrong

In the short run there could be some pressure on GBP and some volatility in it. It should bounce back when the dust settles and should appreciate against NZD.

https://www.tvnz.co.nz/one-news/new-...says-no-europe

Agree. The opportunity was when GBPNZD cracked 1.77 (over 56c for the NZDGBP thinkers) and it's unlikely to crack that with NZD strength.. For NZD, the best ratio of upside to downside for exposure to those currencies is in the Euro. If you have HKD or SGD then that's a difference story.

We're up 22% against the pound since the start of the year, just over 56p and very close to an all time high. I think the outlook for the pound remains very weak with Brexit concerns.

I am looking for 60p over the next few months.

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Originally Posted by Roger

We're up 22% against the pound since the start of the year, just over 56p and very close to an all time high. I think the outlook for the pound remains very weak with Brexit concerns.

I am looking for 60p over the next few months.

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Last September a dinner in London was converted at 38 something

Always time holidays wrong

But starting to put some GBP on those Cash Passport thingies (probably a stupid way to buy holiday money?)

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Originally Posted by winner69

Last September a dinner in London was converted at 38 something

Always time holidays wrong

But starting to put some GBP on those Cash Passport thingies (probably a stupid way to buy holiday money?)

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I seem to always get currency wrong to.

Wow Sterling has made quite something of a comeback...I guess I can kiss goodbye to any chance of me being a successful currency trader !

Was thinking in the back of my mind about the vague possibility of parallel importing a later model Euro car if we got to 60p. I think the correction back down has probably saved me from any temptation and saved a lot of money, decent silver lining in that cloud :)

https://www.poundsterlinglive.com/nz...at-8-month-low

Pound Pushes Fresh8-Month High Against New Zealand Dollar

There has to be the possibility of the Pound over correcting if May pulls of the no deal brexit. What do you think ?

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Originally Posted by ynot

There has to be the possibility of the Pound over correcting if May pulls of the no deal brexit. What do you think ?

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The higher you can push the price, the more lucrative the shorting. . .

It dropped like a stone when the referendum results came out....up and down a little in the 6 months following with one day dropping to a new low...yes, it could well drop suddenly...I don’t gamble on it and I wouldn’t. BUT i have taken my opportunity gambling that it wont last for the forward 5 years.

February, and another a year has ground past, making it time to look forward to asset and currency allocation.

The USD/GBP rate sh*t itself last year only to recover and wind up roughly where it started:

13/03/2019 1.3135
10/08/2019 1.2027
02/02/2020 1.3197

So where to for the GBP this year?

As far as I can see, the US wants a weak dollar, the UK wants a weak pound they can't both be right, which weakling will win?

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Originally Posted by GTM 3442

February, and another a year has ground past, making it time to look forward to asset and currency allocation.

The USD/GBP rate sh*t itself last year only to recover and wind up roughly where it started:

13/03/2019 1.3135
10/08/2019 1.2027
02/02/2020 1.3197

So where to for the GBP this year?

As far as I can see, the US wants a weak dollar, the UK wants a weak pound they can't both be right, which weakling will win?

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The US has the presidential election in November and the UK faces the end of the transition period out of the EU in December. My guess is that Trump will be returned for a second term. The UK and the EU are poles apart in what they want from a new relationship. So I think the volatility will come from the GBP especially towards the latter part of the year.

From recent past form, the current UK Conservative government is likely to put political considerations above economic and financial stability. Boris has said he will not extend the transition period. He has a large majority now so he would have to do a flip flop to change that ‘promise”. Upside potential for the GBP is possible if a comprehensive Canada plus free trade deal with the EU is incredibly negotiated within the year as opposed to a (more likely?) bare bones survival agreement with new border checks and tariffs.

If the UK loses the just-in-time free trade with 50% of its export markets, without new trade relationships with equal benefits, I donÂ’t think that is currently reflected in the GBP. My guess is that the GBP would have to drop to rectify UK competitiveness.

I'm inclined to think that the GBP moves more in response to politicalcertainty/uncertainty than it does to economic good/bad news. So I'm picking that there will be a slow decline in the GBP over the course of the year as the UK becomes slowly and slightly more politically fragile over the course of Mister Johnson's premiership.

After all, a large parliamentary majority means that there are a lot more individuals and factions to be pampered, fed, and watered than is the case with a "normal-sized" majority.

I think that the content of the "Final Brexit Trade Deal*" may well have a one-off effect (either up or down) but this will fade into the general trend quite quickly.

I'm picking a descent through 1.275 as the time to start actively looking to accumulate pounds.



* Final my *rse! This thing will drag on for years. Too many jobs, too much political capital, and too much money at stake for it to be allowed to end.

Quote:

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Originally Posted by GTM 3442

I'm inclined to think that the GBP moves more in response to politicalcertainty/uncertainty than it does to economic good/bad news. So I'm picking that there will be a slow decline in the GBP over the course of the year as the UK becomes slowly and slightly more politically fragile over the course of Mister Johnson's premiership.

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Maybe. The two are entwined. The Political environment affects the investment and economic environment. When No Deal had seemed more likely, the GBP dropped. So perhaps a mixture. If trade barriers are erected as a a consequence of implementing UK only hegemony over standards etc. with an impact on trade then I think inevitably the GBP will be affected.

As far as political uncertainty is concerned, I think that the Boris Johnson faction has definitely triumphed within the Conservatives. So many mp's entered parliament as a result of Johnson heading the Con's campaign. From a party caucus split between remainers, soft brexiters and hard Brexit leavers, they now are all "hard Brexit leavers" even if some still think the best future for the UK would have been as a member of or closely aligned to the EU.

However I don't think political certainty will preclude the GBP being sold off at various stages during Johnson's brinkmanship with the EU. There are still various hard Brexit and cliff edge scenarios affecting services and trade that could spook markets.

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Final my *rse! This thing will drag on for years. Too many jobs, too much political capital, and too much money at stake for it to be allowed to end.

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I don't think many Brexit leaders actually thought they would win a referendum. Just how much self-inflicted pain and subordination of other non-Brexit public matters will the public tolerate?

My opinion is that political certainty/uncertainty can initiate or reverse trends, while economic news can produce variations within trends.

And that large parliamentary majorities act to multiply the number of factions within the governing party, making political management more complex. You can see this in the other day's cabinet reshuffle - the rewards of loyalty and the purge of the disloyal elements. But give it a few years, and there will arise factions which need to be placated.

I'm coming to think that this year won't be a good one for the UK, the GBP, and UK markets, but also that it won't be a particularly bad one either.

I think I'll sit there with my thumb up my *rse waiting for the GBP/USD to move outside the 1.275-1.325 range, quietly accumulating pounds and putting those pounds to work outside the UK.

Good job I trim my nails regularly. . .

1) Some say the exchange rate reflects the relative economic performance of the two countries

2) It's also said that post-Brexit and various political turmoils over the years the British economy has struggled and some say stuffed

Below GBPNZD chart for last 5 years. Last time I was over there was 5 years ago and the rate was in low 50's

About the same today - does that mean that the NZ economy is about as stiffed as the UK economy

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Originally Posted by winner69

1) Some say the exchange rate reflects the relative economic performance of the two countries

2) It's also said that post-Brexit and various political turmoils over the years the British economy has struggled and some say stuffed

Below GBPNZD chart for last 5 years. Last time I was over there was 5 years ago and the rate was in low 50's

About the same today - does that mean that the NZ economy is about as stiffed as the UK economy

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Turn of the century 2000, One NZD bought about 30p, today it buys 51p. Immediately before the Brexit referendum, in May 2016, One NZD bought about 45p. So on the face of it, The current generation of British pollies have been stuffing up the British currency (and economy?) more than their Kiwi counterparts.

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Originally Posted by Bjauck

Turn of the century 2000, One NZD bought about 30p, today it buys 51p. Immediately before the Brexit referendum, in May 2016, One NZD bought about 45p. So on the face of it, The current generation of British pollies have been stuffing up the British currency (and economy?) more than their Kiwi counterparts.

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Yes the GBP was very strong while the NZD was very weak due largely I think to the terms of trade.
Today both the GPB and NZD are at slightly weak levels comparatively,NZD slightly stronger than GBP according to numbeo's average wage calculation.