Pound Sterling / New Zealand Dollar - GBP/NZD

The external value of the New Zealand dollar structurally depends on the level of the world farm raw material exchange rates (as 40% of the New Zealand exports are farm products exports) and also on the economic situation of the main trade partners of New Zealand: the countries of the ASEAN (South East Asia).

Despite the ancestral links between New Zealand and Great Britain, it is the NZD/USD that has on the Forex the more important trading volumes on the Kiwi, the New Zealand dollar.

As regards the fluctuations of the cross GBP/NZD, the mathematic and theoretical relation GBP/NZD = GBP/USD x USD/NZD is not necessarily a guide for the trends, but we have to notice that, about the period 2004-2008 for example, the bullish trend of the cross GBP/USD, combined with the bearish trend of the cross USD/NZD (so a bullish trend of the inverse cross, the cross NZD/USD), would have tend to absorb the fluctuations of the cross GBP/NZD (so limited the amplitude). However, during this period, the fluctuations alternately had increases and decreases.

With an exchange value GBP/NZD = 2,7 by the end of 2004, a slow bearish trend made the cross reached the value GBP/NZD = 2,5 by the end of 2005, then a +20% increase intervened until June 2006 (GBP/NZD = 3,00), before that a regular decrease of the cross and a concomitant appreciation of the New Zealand dollar (but with a moderate amplitude) endured until February 2008 (GBP/NZD = 2.45).

Then the Pound Sterling appreciated against the Kiwi until September 2008 (GBP/NZD = 2,8) then it lost ground until January 2009 (GBP//NZD = 2,6). During the first trimester of 2009, it won ground (GBP/NZD = 2,8 in March 2009); then it clearly depreciated against the Kiwi to reach GBP/NZD = 2,2561 by mid-November 2009, following the strong depreciation of the USD against the same Kiwi which doesn’t compensate its re-appreciation against the Pound Sterling on the same period.