Author, Mike Smith
A GBP to NZD forecast is an expectation of whether the exchange rate will be higher or lower at a future date.
GBP to NZD forecasts can be used when deciding if you should exchange your money now or later.
Will the New Zealand Dollar go up or down in 2024?
Overall, the GBP to NZD rate has been drifting down in 2024. We see it as more a case of profit taking than fundamentally driven.
To give some context, the GBP-NZD rate reached over $2.15 in August 2023. That was the highest level since way back in 2016 – pre-Brexit days.
Both the UK and New Zealand have a similar economic outlook for 2024, although the NZ Dollar is more sensitive to global sentiment, which is a key driver right now.
Here are the main factors influencing GBP to NZD exchange rate forecasts:
- Inflation is marginally higher in New Zealand than the UK
- The New Zealand economy is expected to outperform the UK’s in 2024
- Risk sentiment is working against the New Zealand Dollar
Inflation is the big buzzword at the moment in currency markets.
But it is becoming less of an issue in 2024.
The current inflation rate in the UK and New Zealand is sitting at a little over 4%.
While inflation is now less than half peak levels, it’s still above target for both countres. The Bank of England targets 2% inflation and the Reserve Bank of New Zealand targets 0%-3% inflation.
Both countries have taken a fairly aggressive stance against inflation by raising interest rates considerably.
The New Zealand base rate is 5.50% compared to 5.25% in the UK.
We believe interest rates have peaked in both countries. It’s now a case of which central bank begins to cut first. Probably the UK.
The reason is the economic landscape looks more favourable for New Zealand.
In 2024, the New Zealand economy is expected to grow by 1.3% whereas the UK economy is expected to have 0.7% growth (source: OECD Economic Forecast for NZ and UK). Recent data suggests the UK may even tip into recession.
A third, and important factor that is driving the Pound to New Zealand Dollar rate is global risk sentiment.
The New Zealand Dollar is particularly sensitive to global risk.
Global risk is a broad concept and can entail all sorts of things like economic or financial crises, war, geopolitical squabbles and even natural disasters.
If investors are nervous, it tends to impact the NZ Dollar more than the Pound.
On balance, we see the NZ Dollar as fundamentally undervalued. It’s been hit by forces out of its control and the economy is in decent shape. The rise in the GBP-NZD rate in 2023 looks to be gradually unwinding in 2024.
It’s hard to be exact when it comes to predicting exchange rates.
Forecasting a currency is really about the likely direction rather than coming up with a precise number.
By the way, if you find a precise forecast exchange rate online, you are reading BS. You may as well Google next week’s lottery numbers while you’re at it.
When it comes to the future, all you can do is make an informed judgement based on what is known or can be reasonably anticipated.
That’s how we navigate currency markets – with a common-sense approach.
For further information, our guide on transferring money to New Zealand explains the process.
Alternatively, if you would like to discuss the GBP to NZD outlook, or find our latest rates, please request a quote below.
What is a good Pound to New Zealand Dollar rate?
The GBP to NZD exchange rate lets you know how many New Zealand Dollars can be bought for 1 British Pound.
For someone looking to exchange British Pounds (GBP) into New Zealand Dollars (NZD), they want the highest rate possible.
Whereas someone selling their New Zealand Dollars and buying British Pounds wants a low GBP to NZD exchange rate.
The easiest way to tell if the current GBP to NZD rate is good or bad is to look at historical exchange rates.
Even over the last 5 years, the average GBP/NZD rate isn’t much different at $1.97 (source: Bank of England).
Using average historical rates is a simple way to gauge how good or bad today’s rate is.
When the GBP to NZD rate is above its long-term average of $1.97 it can be considered a good rate to exchange Pounds into New Zealand Dollars.
At present, the GBP to NZD rate is above the long-term average, although has tapered off since August 2023, when it got close to 5-year highs.
The further the rate is away from the average, the more extreme it is.
Over the past 10 years, the highest rate was on 10 September 2015 when the GBP/NZD rate reached $2.4596.
The lowest rate in the past 10 years was on 8 November 2016 when the rate fell to $1.6846.
Most of the big moves happen as a result of significant events – for example, Brexit or Covid-19.
Of course, these types of significant events are almost impossible to predict.
If you are looking to exchange money, you are usually better off focusing on current trends and recent highs/lows as a guide to timing.
GBP to NZD weekly forecast – a short-term approach
Exchange rates over a weekly period will have a much narrower set of drivers than over longer time frames.
Over the space of a week, only a handful of things can influence the GBP to NZD exchange rate.
Most of the important news that will impact exchange rates every week is scheduled in advance, so investors aren’t caught by surprise.
You can view the scheduled economic events over the coming week by looking at the DailyFX economic calendar.
There are other free economic calendars you may find online, but I like this one because it has a nice, clear layout and gives a low, medium, or high level of importance to each event.
As currency brokers, we follow the weekly economic calendar closely as it gives you a heads-up on potential risks that lie ahead.
If you are concerned about the GBP/NZD rate moving against you, it can make sense to exchange your money before a high-impact event.
Another way of looking at the GBP to NZD exchange rate over a weekly horizon is to assess the current trend and any near-term price patterns.
Technical analysis is the fancy name for using price patterns to predict future exchange rate movements.
You can get a decent overview of GBP to NZ Dollar technical analysis here.
The period defaults to an Hourly outlook, but you can change it to Weekly or whatever time frame you are interested in.
Technical analysis is by no means an exact science, but it can give you another perspective on the GBP to NZD exchange rate.
If you would rather speak to someone about your requirements, you can always talk to a currency broker and discuss your options.
GBP to NZD forecast 12 months or more (practical approach)
When you look at exchange rates over longer periods it calls for a different approach.
Short-term news simply becomes noise.
The passage of time allows bigger themes to play out but also means the number of variables impacting an exchange rate becomes huge.
My view is that there are so many drivers of the GBP to NZD rate over the long term that you are best to use historical rates as a guide to timing.
Let’s keep it simple here.
If you look at a 1-year, 5-year and 10-year chart for the GBP to NZD rate, you can get a good feel for how the rate has traded historically (peaks, troughs and trends).
Need some guidance on Pound to New Zealand Dollar exchange rates?
Getting a favourable GBP to NZD exchange rate can make a big financial difference to you.
When you look at a chart of the GBP/NZD exchange rate, you can see there are a lot of big swings – both up and down.
I’ve found the GBP to NZD rate to be one of the more volatile currency pairs, so timing is important!
Proactive timing can mean the difference between a good and bad rate.
At Key Currency, we are fundamentally different from other money transfer companies.
We are not an impersonal bank or a faceless online app. You can find out about our expert team on our website.
Our money transfer service is designed to help make transferring money internationally easy and cost-effective.
We can discuss exchange rates and market trends with you and agree on the right time to exchange your money, by understanding your requirements and taking advantage of any favourable movements.
Our service has a 5-star rating on Trustpilot, based on over 1,800 customer reviews.
Key Currency is also regulated by the FCA as an Authorised Payment Institution (No. 753989). All money transfers are conducted through safeguarded client accounts.
If you would like to find out more about our service or our latest GBP to NZD rates, get a free quote below.