Holding New Zealand currency for a long time

Booge

Hi All,

I am due to go on holiday to new zealand next march 2023. The flights are already booked. I wanted to go in November but due to shortage of flights I had to wait until March. 

I am concerned that the pound will continue to drop against foreign currencies over the next 6 months due to UK's economic problems . Therefore I would like to buy NZ currency now to avoid further devaluation of the pound. Ideally this would just be on a currency card of some kind.

However, this could be risky if the company I buy the card with goes insolvent before I go on holiday. So I am basically trying to find out what card can I get where I buy the currency now at a reasonable exchange rate but it is held in something that has an FSCS  guarantee? Does anything meeting these criteria exist?

Many thanks,

Jonathan T

Voyager2002

There are two separate issues here:

1. You believe the value of the pound will fall and so want to protect yourself against this;

2. You will be spending money for your holiday abroad.

For 1. you need some secure way to hold foreign currency, which could be in US dollars, Euro or whatever. Most of the high street banks offer dollar and Euro accounts and these come with FSCS protection. There would be costs to exchange currency with them and then exchange back: you have to decide whether you expect the fall in the pound to be enough to make up for these costs. An exception is the Multi-currency account with Fineco bank, which I hold, where currency exchange is at rates that are near to perfect, but where protection is provided by the Italian equivalent of FSCS.

For 2. you need one of the solutions often discussed here, such as a Cumberland current account or the Curve card (I use both of these). With these cards you immediately pay the sterling equivalent of anything you spend in New Zealand dollars, but if the pound has fallen over the previous six months then you will be able to exchange the money in your US dollar account back into sterling at a profit to cover some of your expenditure.

Note that I do not particularly expect the pound sterling to fall (although would not be surprised if that happened). If, as seems likely, our economic problems are accompanied by tax cuts then we will see a substantil increase in interest rates, and that is something that tends to increase the value of the pound. So really anything could happen.