New Zealand - currency, car hire & hotels.

Kehi

We are going to NZ in December and currently booking hotels and car hire etc.
Some of the hotels are booked through Booking.com and the rates are quoted in sterling and we’ll need to pay in NZD on arrival (the conversion won’t be done until the day). Some are booked directly with the NZ hotels and we know now what we will pay in NZD.
Is it advisable for us to buy NZD pre-Brexit and to amend our hotel bookings so that all reservations are in NZD so we’re not gambling with exchange rates post-Brexit and we can use the pre-bought currency? I don’t normally take much cash away, and generally take a risk with exchange rates but obviously things are currently a bit different.

Also, most of the car hire quotes are based on paying on collection - some quote in NZD and others in Sterling, so again there’s a risk of a bad exchange rate. Are we perhaps better off reserving and paying upfront in sterling, so long as there’s a suitable cancellation clause?

Thanks again for any responses.

eDicky

What's your intended method of buying NZD in advance?

In what way do you see that 'obviously things are currently a bit different' to your general view of exchange rate risk?

The value of GBP may be higher in December than it is now, so you would still be 'gambling' by exchanging now.

Car rental prices could increase significantly towards your rental date, negating or reversing the potential benefits of paying now with free cancellation.

Kehi

Thanks eDicky. I would be using cash to buy NZD but could also put the cash on a We Swap card and lock in a rate, I guess.
I was just referring to Brexit - I know we’ve already seen some of the damage, and I can handle a small drop in the value of Sterling, but the uncertainty of it makes me want to prepare more than I normally would.

eDicky

The future probabilities/uncertainty of Brexit is already priced in to the current value of the pound in the Forex market. It's only unexpected events that will cause a sudden rise or fall, such as the 2016 referendum result. There's always some movement over time of course, and nobody knows what that will be between now and November.

You could hedge by exchanging some funds now and the rest later, but if you do that with cash the margin that you pay on the rate will offset to a significant degree any advantage gained.

Instead of using WeSwap you might look at Revolut, with which you can convert at the perfect interbank rate (weekdays) with zero fees on up to £5k/month, 0.5% thereafter.