Are you looking for the best forex broker for New Zealand residents? We’ve covered the local market, key broker considerations, and the top brokers that accept New Zealand residents as clients.
Forex brokers often differ quite a bit in the services and products they offer their clients, so think carefully about your trading needs before funding a trading account.
Quick Overview: Best New Zealand Forex Brokers
4 Best Forex Brokers in New Zealand
It is important to consider your individual trading needs when looking for the best online brokerage firms that accept New Zealand clients to trade Forex. Each New Zealand forex broker listed below also ranks well in the key broker considerations listed in the previous section.
eToro USA LLC; Investments are subject to market risk, including possible loss of principal.
About Forex in New Zealand
Traders living in New Zealand are fortunate to be able to choose from a wide range of reputable online brokers who will accept them as clients. Forex trading is legal in New Zealand and the country offers a relatively safe location for traders due to decent local regulations.
The currency used in New Zealand is the New Zealand Dollar (NZD or NZ$) – it is also called the “kiwi” among currency traders. The NZD is divided into 100 small denominations called cents. The Bank for International Settlements (BIS) has ranked the NZD 10e among the most actively traded currencies in the world in April 2016. The BIS also noted that the NZD participated in 2.1% of the average daily turnover in the foreign exchange market observed that month.
A few key fundamental factors can affect the value of the currency:
- The price of housing and relevant commodities produced and exported from New Zealand, as well as oil and agricultural products such as beef, dairy, lamb and wool.
- Natural events like major earthquakes
- Trade-related issues such as tariffs and trade agreements
- A rise in risk aversion among investors
Online brokers must be licensed and subject to supervision by New Zealand’s financial regulator known as the Financial Markets Authority (FMA). The FMA started operating in 2011 after the global financial crisis. The trading losses prompted the New Zealand Parliament to pass the Capital Markets Bill.
The FMA is also a member of the International Organization of Securities Commissions (IOSCO), so it operates under the stricter rules that the organization requires. The FMA’s primary responsibility is to enforce the regulations relating to financial services firms which provide access to New Zealand markets.
What to consider before choosing a broker
Choose a reputable broker that you feel safe with when making a margin deposit. You will also want to consider the following list of key considerations.
One of the most important things you might want to look for in a quality forex broker is the stringency of their regulatory environment, as the best online brokers will be overseen by a good financial regulator. The regulator should ensure that any broker operating in its jurisdiction keeps client funds separate from its own funds to protect them in the event of the broker’s insolvency.
Maximum leverage ratio
A higher leverage ratio means you can control a larger position with a given amount of margin. EU and US regulated brokers typically offer low leverage ratios of 30 to 1 and 50 to 1 respectively, while some regulated brokers in more lenient jurisdictions may offer leverage ratios of up to 3 000 to 1 on foreign exchange transactions.
Forex brokers allow clients to trade using trading software which may include their own proprietary platform and/or those offered by third parties such as the very popular MetaTrader 4 or 5 (MT4/5) platforms. Any modern electronic platform should allow you to draw charts and trade directly from them and have a newsfeed and a customizable interface. Some platforms like MT4/5 will even allow you to create custom indicators, backtest strategies and trade automatically based on programmed algorithms.
Teaching and research materials
You might need educational resources to help you improve as a trader if you are new to forex trading. Many brokers offer online courses, e-books, webinars, videos, and articles that can help you educate yourself. You could also benefit from your broker’s expert fundamental and technical research.
You will want to seek prompt customer support from your broker to prevent potentially costly losses from occurring. Virtually all brokers offer prompt support in English via live chat and telephone, although email and fax are usually also options if a question is not particularly urgent.
Brokers vary widely when it comes to the minimum initial margin deposit they require for you to start trading, so check to see if you have the right amount of funds available. Some brokers accept deposits in NZD, but you may need to convert them to a major currency accepted by your broker such as Euro, US Dollar or British Pound when you open an account.
Types of Forex Accounts
Almost all online brokers allow you to try out their services and practice trading using a free demo account. They also usually have multiple account types to accommodate different customers:
- Micro accounts could be useful if you are a new trader
- Standard accounts are best suited for medium-sized traders
- VIP accounts are for well-funded traders
- Swap-free Islamic accounts are for Muslim clients who wish to comply with Shariah
You will find that most international brokers will accept you as a client if you are a New Zealand based forex broker. The amount of leverage you have and the minimum deposit required to open an account may vary.
Select a well-regulated and reputable broker that separates its funds from its clients and meets your personal needs.