- UK currency dips on house price forecast – RICS estimates significant drop off in near-term
- UK trade data prints positively – Deficit reduction garners little influence for Sterling
- New Zealand Dollar positive after RBNZ interest rate decision – Rates frozen
- NZ credit card data due tonight – UK construction output stats expected tomorrow morning
The Pound has been a relatively unstable option for investors recently, with losses, minor gains or tight trending being commonplace for the UK currency.
By comparison, the New Zealand Dollar has been a more appealing option thanks to recent central bank news, although the ‘Kiwi’ has also suffered a number of losses alongside its gains.
UK Economic News: Muted Reception to Trade Balance Data Exposes ‘Brexit’ Invasiveness
The Pound’s losses today have been fairly pronounced, with declines including -0.3% against the US Dollar (GBP/USD), -0.4% against the United Arab Emirates Dirham (GBP/AED) and -0.5% against the Chinese Yuan (GBP/CNY). Sterling has trended in a narrow range against the New Zealand Dollar (GBP/NZD), while one notable gain has been by 0.6% against the Norwegian Krone (GBP/NOK).
UK economic news today has mainly focused on trade and house prices; in the latter case, Royal Institute of Chartered Surveyors (RICS) members have estimated that in the next three months, at least, UK house prices are expected to drop off. In addition to a cooling market, the RICS has also cited the intense uncertainty associated with the EU Referendum as a justification for its prediction.
The other big UK news, concerning the trade balance in April, has been positive on all counts, showing a reduction in the current deficit to the lowest level since September 2015. Despite this good news, the Pound has been making little in the way of positive movement, mainly owing to the greater issue of the EU Referendum taking precedence.
Commenting on Chancellor George Osborne’s lack of mention of this positive news, the Guardian’s Economics Editor, Larry Elliot, has said:
‘Put simply, good economic news doesn’t really suit the Chancellor at the present juncture. His narrative is that the risk of Britain leaving the EU has left the economy trembling on the edge of the precipice and for that story to stick he needs signs that consumers and businesses are taking fright at the risk of ‘Brexit’’.
New Zealand Dollar Mostly Stable after another RBNZ Rate Freeze
The New Zealand Dollar has made a generally steady performance today, with the latest domestic data consisting solely of Reserve Bank of New Zealand Dollar (RBNZ) news.
In an expected outcome, the RBNZ elected to leave the interest rate on hold at 2.25% last night. After the announcement was made, RBNZ Governor Graeme Wheeler said:
‘Monetary policy will continue to be accommodative. Further policy easing may be required to ensure that future average inflation settles near the middle of the target range. We will continue to watch closely the emerging flow of economic data’.
This boilerplate response is likely the reason that the NZD has not risen further today, having so far recorded a gain of 0.4% against the Australian Dollar (NZD/AUD).
Future GBP, NZD Forecast: NZ Card Data Ahead, Mixed UK Construction Stats Expected Tomorrow
The near-future will bring the announcement of the New Zealand base and retail card spending results for May; the only forecast currently made has been for the retail figure to dip from 0.9% to 0.5%.
Following on from this tomorrow morning will be the UK’s construction output printings for April, which are expected to rise on the month but fall on the year.
Current GBP, NZD Exchange Rates
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate was trending in the region of 2.0371 and the New Zealand Dollar to Pound Sterling (NZD/GBP) exchange rate was trending in the region of 0.4910 today.
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