With risk sentiment continuing to improve thanks to rising Chinese factory output, the high-yielding New Zealand Dollar has strengthened against many of its major peers this week. Conversely, the Pound has extended its bearish run after retail sales were seen to have slumped compared with sales at this time last year.
The Pound Sterling to New Zealand Dollar exchange rate is currently trending in the region of 2.0392.
After already having a poor week in terms of domestic data, Sterling was depressed further after the Bank of England published the minutes from their most recent monetary policy meeting. For a third-successive meeting, Martin Weale and Ian McCafferty voted for an immediate benchmark rate increase. However, the other seven policymakers have stood firm by delaying a rate-hike for the foreseeable future.
It seems that the two hawks have become lone wolves, and no matter what they argue they will be overruled by the majority. With this in mind, Sterling declined dramatically as sentiment towards the BoE took a negative turn.
Wednesday saw the New Zealand Dollar hold its ground after market sentiment improved. This can be attributed to recent data out of China showing signs of improvement and trader focus not being dominated by geopolitical fears.
The New Zealand Consumer Price Index declined late on Wednesday evening from 1.6% to 1.0%. This has relieved pressure on the Reserve bank of New Zealand to change their benchmark rate.
The Pound Sterling to New Zealand Dollar exchange rate has fallen to a low of 2.0366.
A decline in British retail sales has seen Sterling extend its bearish run on Thursday. Year-on-year Retail Sales declined from 4.4% to 3.1%, with September’s monthly sales contracting by -0.3%.
The Office for National Statistics stated; ‘Textile, clothing and footwear sales provided the greatest source of down wards pressure, decreasing by 7.8% compared with August 2014, and by 4.1% compared with September 2013. Feedback from retailers suggested the fall was a result of unseasonably warm weather meaning consumers have delayed purchases of autumn and winter clothing.’
The ‘Kiwi’ (NZD) has enjoyed a surge on Thursday courtesy of a Chinese manufacturing report. October’s preliminary Chinese Manufacturing PMI was forecast to equal September’s figure, but the actual result advanced to 50.4.
Hongbin Qu, Chief Economist, China & Co- Head of Asian Economic Research at HSBC said; ‘Disinflationary pressures intensified, as both the input and output price indices declined further. Meanwhile both employment and inventory indices improved. While the manufacturing sector likely stabilized in October, the economy continues to show signs of insufficient effective demand.’
Pound Sterling to New Zealand Dollar Exchange Rate Forecast to Fluctuate
New Zealand’s Trade balance data, due for publication later on Thursday evening, is likely to provoke volatility. However, a complete absence of domestic data on Friday could see the New Zealand Dollar decline as the day progresses.
Sterling will be subject to volatility on Friday with the third-quarter Gross Domestic Product data forecast to show a decline in growth.
The Pound Sterling to New Zealand Dollar exchange rate has reached a high today of 2.0479.
New Zealand Dollar (NZD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
New Zealand Dollar,
,US Dollar,0.7850,
New Zealand Dollar,,Euro,0.6198,
New Zealand Dollar,,Pound,0.4902,
New Zealand Dollar,,Australian Dollar,0.8935,
US Dollar,,New Zealand Dollar,1.2737,
Euro,,New Zealand Dollar,1.6132,
Pound Sterling,,New Zealand Dollar, 2.0397,
Australian Dollar,,New Zealand Dollar,1.1191,
[/table]
