The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate strengthened by around 0.43% on Thursday morning.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate gained by around 0.33%.
With geopolitical tensions in Libya mounting as they request an end to the United Nation’s arms embargo in order to fight the Islamic State, market sentiment dampened considerably. The lack of risk appetite has had a detrimental effect on the risk-correlated ‘Kiwi’ (NZD), a downtrend initiated by poor consumer confidence data.
The Canadian Dollar, meanwhile, softened against many of its major peers as oil prices resume declination; nearing $50 a barrel. With fears mounting that oversupply will outweigh demand considerably, many experts predict crude will fall to fresh lows.
In contrast, positive domestic data fuelled Sterling’s bullish run. Minutes from the most recent Federal Open Market Committee (FOMC) meeting highlighted policy maker caution with regards to rate hikes. This bolstered speculation that the Bank of England (BoE) will be the first major central bank to upwardly revise the benchmark interest rate.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trending in the region of 2.0530.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is currently trending in the region of 1.9288.
Pound Sterling (GBP) Exchange Rate Gains on Domestic Data
The Confederation of British Industry (CBI) Trends Selling Prices was forecast to soften from -6 to -7 in February, but the actual result advanced to 8. CBI Trends Total Orders eclipsed the median market forecast of a rise from 4 to 6, with the actual result reaching 10.
‘Our manufacturers have more of a spring in their step this month, regaining some of the momentum lost towards the end of last year,’ said Rain Newton-Smith, economics director at the CBI. ‘The drop in oil prices is good news for the manufacturing sector in the UK, bringing with them lower operating costs, but North Sea producers are clearly suffering.’
New Zealand Dollar (NZD) Exchange Rate Softens on Damp Risk Appetite
The situation between Libya and Islamic State extremists has led to trader risk-aversion, causing the high-yielding ‘Kiwi’ to decline against the majority of its most traded currency rivals.
‘Libya needs a decisive stance from the international community to help us build or national army’s capacity and this would come through a lifting of the embargo on weapons … so as to deal with this rampant terrorism,’ Libyan Foreign Minister Mohamed Dayri told the Security Council.
Additional New Zealand Dollar declination can be attributed to less-than-desirable domestic data results. The Consumer Confidence Index declined by -3.8% from 128.9 to 124.0 in February.
Canadian Dollar (CAD) Exchange Rate Declines on Crude Slide
As US crude inventories rise, fears that oversupply will outweigh demand caused prices to fall sharply. Given that the ‘Loonie’ (CAD) is sensitive to movement in the oil market, the Canadian Dollar downtrend was inevitable.
‘The inventories were the trigger for the sharp correction lower,’ Carsten Fritsch, an oil analyst at Commerzbank in Frankfurt, said. ‘The focus is again back on the oversupply – the big question is for how long?’
The general declination of the US Dollar is also weighing on the Canadian asset as it tracks ‘greenback’ (USD) losses.
Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate Forecast to Hold Gains
With geopolitical tensions dominating trader focus, especially regarding the lack of resolution between Greece and the Eurogroup, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is likely to hold gains for the remainder of Thursday.
Pound Sterling to Canadian Dollar (GBP/CAD) Exchange Rate Forecast to Maintain Advance
Given that oil prices are showing no signs of recovery, and with a lack of influential data to provoke changes, the Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate is likely to maintain its advance for the rest of Thursday’s trade.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate was trending within a region of 2.0401 and 2.0576.
The Pound Sterling to Canadian Dollar (GBP/CAD) exchange rate was trending within in the region of 1.9216 and 1.9912.
