Pound to NZ Dollar Currency Fluctuations over a Day

In the first part of this article, examining fluctuations in the Pound to New Zealand Dollar exchange rate, we looked at time frames of 5 years and 2 months. In this second part of the article we'll take a look at how the Pound to Dollar exchange rate can vary quite widely in only one day, and explain how you can get the best exchange rate when you are converting your hard-earned Pounds into Dollars.

In the graphs and examples on the previous page we have used the average exchange rate over 24-hour period to illustrate the way the market moves over a period of weeks and months. But the market can also move significantly over the course of a day, as illustrated in the graph below, which illustrates the daily highs and lows of the UK Pound to New Zealand Dollar exchange rate in October 2008: 

If you take a look at October the 8th, you can see that the lowest rate was 2.7345 Dollars to the Pound, and the highest was 3.01 Dollars to the Pound – a massive 27.55 cent difference for every Pound exchanged. If you changed £100,000 at the best possible rate on this day, you would get around $301,000. At the lowest rate, you would have received around $273,450 – a $27,550 difference in just one day!

Literally hundreds of economic and even emotional factors influence the market, so it is almost impossible to predict spikes like the one that occurred on this one day. The rate of over NZ$3 to the Pound only lasted for a very brief time; it would not really even have been reflected in the averages over this day, which were only slightly higher than the rest of October.

Even if you were hunched over your computer monitoring the exchange rates at exactly the right moment, you may have had trouble getting through to your foreign exchange broker, as they were naturally very busy. If however you had a market order in place at what would have been quite an optimistic rate, your foreign exchange transaction would have gone ahead automatically. Remember that you can cancel and change market orders until they are fulfilled, and they cost nothing to set up.

What is the Pound to Dollar Exchange Rate doing today?

Even on a normal day, the Pound to New Zealand Dollar exchange rate typically varies by at least a couple of cents. This graph shows the movement in the Pound to New Zealand Dollar exchange rate over the last 24 hours. You can use the drop-down menu to change the time-span from "24 hours" to  longer time frames, such as "last week", "last month" and "last year", then click the "Chart Now" button to show the new graph. (Please note that you will need Java installed and enabled on your browser to make this work properly.)

So how do you know when to exchange?

Fluctuations in the currency market are hard for the experts to predict, and it is impossible to know with any certainty when the exchange rate has peaked or bottomed out. The general trend for the New Zealand Dollar is that it “goes up the stairs and down the lift” – it climbs quite slowly then drops back down relatively quickly.

If you are still receiving a regular income from the UK, you may find that currency exchange volatility makes it hard to predict what you will receive from month to month. Find out how to get the most out of your UK income in our article on Regular Payments from the UK.

Everyone has different expectations of how many Dollars they want to get for their Pounds, and how long they are willing to wait before they change their money. Please contact us to discuss the best course of action for you.

At Broadbase International we specialise in helping British migrants make a confident start to their new lives. Please contact us if you have any questions about the financial side of life in New Zealand, and don't forget to order your free copy of our comprehensive New Zealand Guide.