The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate strengthened by around 1.37% on Tuesday morning.
After British economic data printed positively the Pound strengthened versus most of its major peers. The gains will be somewhat laboured, however, with continued negative sentiment towards an inactive Bank of England (BoE) and with political uncertainties mounting as we draw nearer to the general election.
The New Zealand Dollar, conversely, softened versus the majority of its most traded currency rivals. This can be attributed to tracking the Australian Dollar declination after the Reserve Bank of Australia (RBA) cut its benchmark interest rate. Further declination is as a result of traders awaiting New Zealand’s labour data on Tuesday evening.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trending in the region of 2.0859.
Pound Sterling (GBP) Exchange Rate Edges Higher on Positive Data
Despite having been forecast to decline from 57.6 to 57.0, the UK Construction PMI eclipsed the median market forecast, with the actual data reaching 59.1. Tim Moore, Senior Economist at Markit, stated; ‘UK construction companies have found their feet again after a protracted slowdown in output growth at the end of 2014. Stronger trends were recorded across housing, commercial and civil engineering, although each category of activity still experienced much slower growth than the high-water marks achieved last year.’
The Sterling advance is expected to be sluggish, however, with mounting political uncertainties as we get closer to the general election. With several parties promoting anti-austerity stances, and with the potential of a Brexit should UKIP gain office, traders are treading cautiously with regards to Sterling investment.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate dropped to a low today of 2.0544.
New Zealand Dollar (NZD) Exchange Rate Dives ahead of Labour Data
As explained above, a significant proportion of the ‘Kiwi’ (NZD) declination can be attributed to tracking Australian Dollar losses. After the RBA opted to cut rates amid low oil prices, traders forecast that the Reserve Bank of New Zealand (RBNZ) would emulate its South Pacific counterpart.
In addition to tracking ‘Aussie’ (AUD) losses, the ‘Kiwi’ softened as traders prepare for significant labour market data. Both Employment Change and Unemployment Rate are expected to show a positive declination.
Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate Forecast to Hold Gains
Although there is the potential for a ‘Kiwi’ rebound if the labour data prints positively, it is unlikely to have a significant impact with trader focus on policy easing. Therefore, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is likely to hold gains for the remainder of Tuesday.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate has climbed to a high today of 2.0935.
