The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate fell early in Thursday’s European session ahead of the Bank of England’s (BOE) interest rate decision.
Earlier… The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate recorded gains in the second half of Wednesday’s trading after Markit’s UK and Services Purchasing Managers Index (PMI) printed better than forecasts expected.
The ‘Kiwi’ had recorded significant gains earlier in the day when Reserve Bank of New Zealand (RBNZ) Governor Graeme Wheeler suggested that interest rates would remain steady for some time.
Wheeler stated: ‘Some commentators have suggested a cut in interested rates would be appropriate at this stage… However, in our current situation there are important considerations why a period of OCR stability is the most prudent.’
Earlier… The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate suffered losses in the early part of Wednesday’s trading after the latest Fronterra dairy auction showed milk prices jumped by 19.2%.
Last year saw milk prices fall by approximately 50%, a factor that pressured the ‘Kiwi’ exchange rate lower. However, after several consecutive rises in recent months, 2015 could be more positive for New Zealand’s farmers and the New Zealand Dollar exchange rate.
Industry expert Martin Rudings stated: ‘That milk power auction was pretty stellar. The ‘Kiwi’ popped after the auction. The higher price they are getting for milk powder means that the payout that’s estimated from Fronterra is getting closer to being real.’
The New Zealand Dollar to US Dollar (NZD/USD) exchange rate jumped to highs of 74.36 after the auction—a stark contrast to the 72.50 cents it had been trading at before.
The New Zealand Dollar to US Dollar (NZD/USD) exchange rate is presently trending in the region of 0.7386.
‘Kiwi’ Buoyant as New Zealand Employment Change and Unemployment Rate Rises
New Zealand’s labour market produced mixed figures on Tuesday when Employment Change increased favourably but the Unemployment Rate also grew. In the fourth quarter of 2014, unemployment rose from 5.4% to 5.7%. Meanwhile, Employment Change registered 1.2% growth in Q4, bringing the annual figure up to 3.5% from 3.2%.
Industry and labour statistics manager Diane Ramsay stated: ‘Employment didn’t keep up with the record number of people entering the labour force, so even though employment growth was also strong over the quarter, the unemployment rate increased.’
Meanwhile, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate was offered little support when Markit’s UK Composite and Services Purchasing Managers Indexes (PMI) reached higher than forecast levels.
Markit’s Services PMI jumped from 55.8 to 57.2 in January, while the Composite measure grew from 55.3 to 56.7.
Markit stated: ‘The UK service sector started 2015 in a strong fashion as activity and new business both increased at an accelerated and above survey average rates.’
‘Companies were suitably encouraged by these trends to hire additional staff at the joint second-fastest rate in the survey history, using their additional capacity to try and clear backlogs and prepare for further business expansion in the coming months.’
Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate Forecast
Thursday could be a big day for Sterling trading as the Bank of England (BoE) is set to release its latest interest rate decision. Despite economists’ forecasts for borrowing costs to remain the same, the event has caused drastic Sterling movement in the past.
Friday could also be influential for GBP/NZD trading with the release of UK Trade Balance figures.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is trending in the region of 2.0554. The New Zealand Dollar to Pound Sterling (NZD/GBP) exchange rate resides at 0.4868.
