LauraNotts

This is a right pain in the behind for me.

Since our glorious masters at the Student Loans Company fix the rate of exchange once per year my exchange rate for what I must pay on my loan is stuck at $1=£0.50 for the next year until April.

So what should have been $250 a month is now closer to $300 and rising all the time.

(Yes I've contacted them, no they don't care) And people wonder why everyone hates them.

Stgeorge6

When we emigrated in 2003 the dollar was 2.85 having come down from 3.30 the year before , having said that though you could buy a 4 bed house with sea views in Wellington then for less than $300,000.
How things have changed, but glad it becoming more realistic again, just house prices now which are so out stripping kiwi wages which are not great and never have been, so realistily like the UK went through in 2009 that will be the next correction at some point.
At least you can still get you kiwi super at 65 at the moment unlike UK it be heading to 70 before we know it.

bourbon-biscuit

Ahh, the number of times my (Kiwi) husband and I have looked back on when we were here backpacking getting $3.5:1 GBP and we spent a couple of weeks in Wanaka and toyed with buying one of the many lovely homes that were well under $100k. 'No', we thought, 'we'll do the sensible thing and buy something when we make it back here' ...

I guess with hindsight we'd all be millionaires

poppy10

Haven't you got that the wrong way round? If you are earning in NZD and owe money in GBP then you are protected from the recent plummeting value of the NZD by the fact that the exchange rate was fixed back in April when the rate was higher.

So if you have to pay £125 each month, at an exchange rate of $1=£0.50 you have to pay them $250 each month. But now that $1=£0.42, you would have had to pay $297 if the exchange rate was floating. As it is fixed at 0.5 the amount you have to pay should not be changing

poppy10

"The only way is up" is a dangerous sentiment to have, whether you are talking about stock markets, the property market or currencies.

In fact, NZD is still below the longer term trend of £1GBP=$2.5NZD. It's only been since 2009 that it's been below 2.5. For a while it was trading at 3. With three further NZ interest rate cuts forecast this year, and the Bank of England hinting at an interest rate rise at the end of this year, there could easily be a further significant devaluation for NZD to come.

Stgeorge6

A preview of the Reserve Bank of New Zealand monetary policy announcement due on Thursday (23 July 2015) NZ time

Which is 2100GMT Wednesday (22 July 2015)
ANZ NZ are blunt in their assessment of what's going to come from the RBNZ (bolding mine):

Little dispute that the RBNZ will cut
Will maintain a clear easing bias
ANZ cite:

Inflation remains "MIA"
Growth is sub-trend
Outlook for terms of trade is shaping up at least 10% weaker than the RBNZ was projecting in June
Global uncertainty remains high
On the NZD ....

We wouldn't be surprised to see the RBNZ tweak its NZD language. Words like "unjustified" or "unsustainable" (or variations of them) may be dropped.
NZD is still overvalued, but the degree of deviation is no longer stark
ANZ expect more easing after tomorrow, too:

Our assessment is that recent developments are likely worth 25-50bps of additional policy easing on top of what the RBNZ was already flagging
-

More on the RBNZ tomorrow:

RBNZ preview: Decision is whether to cut 25 or 50 basis points

sazzle1979

You and I both :-( I am please for people wanting to transfer GBP to NZD but when we transferred our life savings from the sale of our UK home in October it is a bitter pill to swallow, perhaps to the tune of 30k GBP - not great when you have since decided NZ isn't for you and you want to leave next year.

Perhaps in hindsight we were incredibly naive, one can only hope we make a bit of money on the house to counterbalance the losses.

Tom H

Cut by 25 points


I wouldn't be surprised if it got to 2% by the end of the year.

Genesis

I don't think you were. You were following a dream. In the decade I have been in NZ I have lost a huge amount of money on a poor house choice, a poor investment choice and the vagueries of FOREX. But hey we are all still the right side up.

I changed up life savings at 2.64 in mid 2005.......5 months later it was over 3.00.

Technical loss of about $100k on the amount we changed up. Lost $80k in finance house melt down and about $100k on a crap choice of house, but I have learned from all these debacles.

Genesis

Apparently the market had already priced in this drop..what is likely to hit the dollar is yet another (if it happens) drop in the global dairy price. NZ does appear to be heading into a very, very turbulent time.

Typical. I finally move money from the UK to get a better rate of interest and it all goes Pete Tong. Ho hum. Such is life.

nikkijane88

Just had a UK tax rebate... Thankfully we will get a decent rate sending it over here

chocolate cake

Yeah, really highlights the foolish decisions last year, flying against adversity last year raising the OCR, when no one else was.

Bo-Jangles

.. and they made a lot of noise and threats of more hikes to come, so of course everyone rushed out to fix mortgages. I expect there will be a lot of people weighing up the impact of ducking out and paying the break fees.

Tom H

But Bo, Chocolate - don't you know we've got a 'rock star' economy

Genesis

Run by twats.