While US debt ceiling and federal shutdown fears have been dictating market movement this week, the New Zealand Dollar was able to break away from a recent run of declines against its US and British counterparts as a result of domestic news.
The New Zealand Dollar to Pound Sterling exchange rate was trading in the region of 0.5154 as of 09:50 am GMT
After broadly softening yesterday after New Zealand’s trade deficit unexpectedly expanded, the ‘Kiwi’ recouped losses as investors bet that the Reserve Bank of New Zealand will be the first central bank belonging to a developed-nation to increase interest rates.
As its last policy meeting the RBNZ intimated that it intends to increase interest rates in 2014. Although the Bank of Canada has hinted at the possibility of a rate hike for some time, it hasn’t offered a time frame in the same way as its New Zealand counterpart, and the Bank of England’s decision to tie interest rate increases to the unemployment rate has made it unlikely that a rate rise will occur before 2015 at the earliest.
As industry expert Annette Beacher comments; ‘With all the talk about a US government shutdown, everybody’s forgotten that the Reserve Bank of New Zealand is one of the most hawkish central banks out there. I’m not surprised that the ‘Kiwi’ has picked up a little bit. I think it’s got more to do.’
The NZD/GBP exchange rate hit a high of 0.5162 pence per NZ Dollar
As it stands traders have put the odds of the RBNZ raising rates by April of 2014 at 84 per cent.
Rallying Asian stocks also aided the ‘Kiwi’s advance.
The NZD/GBP pairing may extend its advance in the hours ahead after UK growth figures disappointed. Although the British economy did expand by 0.7 per cent in the second quarter, as expected by economists, it grew by 1.3 per cent year-on-year rather than the 1.5 per cent expected.
Total UK business investment also plummeted by 2.7 per cent rather than gaining the 0.9 per cent forecast.
If today’s US GDP figures also surprise the NZD/USD pairing could be headed for further fluctuations.
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: 0.8286 >
The New Zealand Dollar /Euro Exchange Rate is currently in the region of: 0.6126 >
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5154 >
The New Zealand Dollar /Australian Dollar Exchange Rate is currently in the region of: 0.8813 >
The US Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.2133 <
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9414 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6317 <
The Australian Dollar/New Zealand Dollar Exchange Rate is currently in the region of: 1.1334 <
The Canadian Dollar/New Zealand Dollar Exchange Rate is currently in the region of: 1.1763 >
(Correct as of 09:50 GMT)
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