Breaking new highs for the Kiwi against the British Pound

Media Release

Date: 10 June 2011

Auckland

Breaking new highs for the Kiwi against the British Pound and US Dollar

Jeremy Jukes, FX analyst at Velocity Trade, in a note to clients said today "The Kiwi Dollar has again surged overnight to break post float highs." He went on to say "The NZD has been appreciating substantially over the last month and has hit an all time high of 0.5065 against the GBP and 0.8301 against the USD. Yesterday's official cash rate announcement was more hawkish than expected and caught the market napping as the RBNZ affirmed that New Zealand's economy is on a firm footing with increasing inflation risks likely".

Sargon Elias, General Manager NZ, talking about Velocity Trade's currency transfer service added "the current rates have meant that a large number of clients, who had been holding back because of the uncertainty in exchange rates, are jumping in to lock in pounds and USD at these historic high rates. In particular, we have seen a number of clients lock in rates for purchases of property and high value items in the UK and we have seen signs that these rates appear to have jump started investments overseas". Elias went on to say "Since March 2009 the NZD has strengthened close to 0.35c against the pound after bottoming out during the 08-09 Global financial crisis. To put this in perspective, somebody who was buying an apartment in the UK worth GBP150,000 would have paid NZD $430,000 in 2008 and today, the same apartment would cost only NZD $300,000. This is a difference of $130,000 and that's not even taking into account the falls in property prices in the UK."

Elias went on to say "When you combine the money our customers are saving on their overseas payments with the rates we give them and take into account that we don't charge any transaction fees, it has made for some very happy new home owners".

Jukes went on to say "We have also seen an increase in margin trading activity on our NZD based pairs as our customers are jumping on the chance to trade these currencies at such strong levels which may not be around much longer".

Ends

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