- UK monthly trade deficit shrinks, but Q1 worst since 2008
- Sterling appreciation suggests investor focus is on short-term
- New Zealand Dollar crashes as Panama Papers resurface to damage NZ reputation
- UK production figures due out tomorrow morning
The Pound Sterling has risen overall against its competitors today, although these gains may be only temporary due to the nature of the Pound’s most recent support.
The New Zealand Dollar has essentially nosedived across the board, potentially in response to more ‘Panama Papers’ revelations.
UK Economic News: Trade Balance Stats Highlight Uncertain Future for UK Exporting and Importing
The Pound has, for the most part, made positive progress against most of its peers in the wake of the latest trade balance figures covering March. Against tentative estimates of slight reductions for the total and visible fields, a reduction in the trade deficit was actually shown for all three fields in the third month of the year.
In spite of this, however, the bigger picture has been far dimmer. The Office of National Statistics (ONS), which published the results, also released data covering the period from Q4 2015 to the end of Q1 2016. During this period, the UK trade deficit actually widened greatly, an outcome that IHS economist Howard Archer said was:
‘A truly horrible first quarter trade performance that clearly weighed down on GDP growth’.
Unlike yesterday, the Pound has actually been fairly untouched by the continuing ‘Brexit’ debate.
Sterling gains today have included over 0.3% against the Euro (GBP/EUR) and the US Dollar (GBP/USD), as well as greater gains of 0.7% against the New Zealand Dollar (GBP/NZD).
New Zealand Dollar (NZD) Slumps in the Wake of Renewed ‘Panama Papers’ Scrutiny
The New Zealand Dollar’s most recent losses have mainly stemmed from political developments, as while the ANZ heavy truckometer for April has posted a declining result, card spending during the month has actually increased prodigiously.
The damage to the ‘Kiwi’ is thought to have been done by the most recent development in the ‘Panama Papers’ scandal, where in the wake of some of the countless documents being published online, over 60,000 documents have been linked to offshore tax activities in New Zealand.
The news has apparently heaped pressure on PM John Key to combat this dubious international activity, although the PM himself has denied claims that have painted his country as a ‘tax haven’.
The New Zealand Dollar has fallen by -0.6% against the Pound Sterling (NZD/GBP) and by -0.8% against the Australian Dollar (NZD/AUD) today.
Future GBP, NZD Forecast: UK Industrial and Manufacturing Data due Tomorrow
The next economic announcements out of the UK to watch out for are due tomorrow morning, in the form of industrial and manufacturing production stats for March. In all fields, bar the annual manufacturing result, expectations are for positive outcomes.
Tomorrow night will bring data from New Zealand as well, in the form of the Business NZ performance of manufacturing index for April and the food prices result for the same month.
Current GBP, NZD Exchange Rates
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate was trending in the region of 2.1419 and the New Zealand Dollar to Pound Sterling (NZD/GBP) exchange rate was trending in the region of 0.4670 today.
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