Although the increasing likelihood of the Reserve Bank of New Zealand raising interest rates in 2014 supported the ‘Kiwi’ against several of its rivals this week, the South Pacific asset has fluctuated against a bullish Pound.
The New Zealand Dollar to Pound Sterling exchange rate was trading in the region of 0.5136 as of 10:25 am GMT
After the RBNZ policy meeting, in which it was intimated that rates would be raised in the near future, the New Zealand Dollar rallied and was heading for a five-day gain of 1.4 per cent against the ‘Greenback’.
However, with speculation surrounding the Federal Reserve tapering quantitative easing mounting ahead of next week’s highly-anticipated Federal Open Market Committee meeting the NZD/USD strength could be short lived.
According to trader Michael Johnson, the Fed; ‘may announce a small tapering of US$10/15 Billion, though they’re still printing out plenty of money to buy bonds. We should see the Kiwi drop and the price action suggests we’ve seen the short-term top.’
The NZD/GBP exchange rate hit a low of 0.5117 pence per Dollar
The ‘Kiwi’s advance on the US Dollar was also paired slightly as local reports showed that consumer sentiment declined by 3.4 per cent in September, month-on-month.
New Zealand’s performance of manufacturing index also declined from 59.5 to 57.5 – closer to the fifty mark separating growth from contraction but still above recent averages.
Against the Pound the ‘Kiwi’ didn’t fare so well as strong UK construction figures topped off a week of positive UK news and helped Sterling consolidate recent gains.
But with the ‘Aussie’ bearing the brunt of disappointing domestic employment data the New Zealand Dollar was able to achieve a three-week high against its Australian counterpart.
As stated by economist Peter Dragicevich, ‘The Aussie-Kiwi will, in general, remain under some downward pressure. The divergence between the RBA and the RBNZ remains clear and that’s keeping the interest-rate differential between Australia and New Zealand skewed in the Kiwi’s favour. We think there’s a high risk that the Reserve Bank of Australia does reinsert its easing bias in the minutes.’
New Zealand data to watch out for next week includes the nation’s consumer confidence report, performance of services index, GDP and credit card spending figures.
Current New Zealand Dollar (NZD) Exchange Rates:
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The New Zealand Dollar/US Dollar Exchange Rate is currently in the region of: 0.8119 <
The New Zealand Dollar /Euro Exchange Rate is currently in the region of: 0.6105 <
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5136 <
The New Zealand Dollar /Australian Dollar Exchange Rate is currently in the region of: 0.8777 <
The US Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.2330 >
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9469 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6366 >
The Australian Dollar/New Zealand Dollar Exchange Rate is currently in the region of: 1.1394 >
The Canadian Dollar/New Zealand Dollar Exchange Rate is currently in the region of: 1.1911 <
(Correct as of 10:25 GMT)
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