With positive UK data published on Wednesday, Sterling has managed to gain on the majors. This is in spite of the fast approaching Scottish referendum which has sparked major volatility for the Pound over the past few weeks. The ‘Kiwi’ (NZD) rallied on Chinese economic information, but has softened gradually ahead of the Gross Domestic Product data due for publication late on Wednesday evening.
The Pound Sterling to New Zealand Dollar exchange rate is currently trending in the region of 1.9951.
On Tuesday the Pound, which was already soft by regular standards, cooled against the majority of its major competitors after inflation data dashed hopes of a near-future benchmark rate hike. The yearly consumer price index may have stayed faithful to the market consensus of 1.5%, but the decline has taken the interest rate further away from the Bank of England’s 2% target.
Those invested in ‘Kiwi’ will have had a difficult time of late with several issues anchoring the commodity-correlated currency. A huge cut in global dairy prices had a particularly detrimental effect on New Zealand’s economic standing. Similarly the decline in value of raw materials such as crude oil has anchored ‘Kiwi’ gains.
The Pound Sterling to New Zealand Dollar exchange rate has hit a low today of 1.9848.
Towards the end of the European session on Tuesday the New Zealand Dollar enjoyed a large boost from an announcement made by the People’s Bank of China. The Chinese central bank revealed that they intend to inject 81 Billion US Dollars into China’s banking system. The stimulus proposed has led economists to speculate that the PBoC will resort to cutting their benchmark interest rate in order to tackle the continued weakness in the world’s second-largest economy. New Zealand is likely to benefit from improved trade between the two nations which has been reflected in the ‘Kiwi’s improved standing.
Later on Wednesday evening the New Zealand Gross Domestic Product report is due for publication. GDP data is very likely to spark volatility; although New Zealand’s yearly second quarter GDP is forecast to hold in line with the previous figure of 3.8%.
Sterling has strengthened a little against many of the major currencies after Wednesday’s economic data proved to be mostly positive. The Bank of England published the minutes from their most recent policy meeting. The minutes indicated that two of the policymakers had dissented from Governor Mark Carney’s view on monetary policy. This may not be enough, however, to re-kindle speculation of a near-future interest rate hike as other British data suggests that falling unemployment has not led to better wages.
Average weekly wages, excluding bonuses, increased by 0.7% on a year-on-year basis which is the smallest growth since comparable reports began. The continued miscorrelation between wages and inflation is the primary reason that the BoE has continued with the current low benchmark rate. A fall in unemployment, however, is a big positive for the UK economy and the jobless rate now stands at a six-year low.
The Pound Sterling to New Zealand Dollar exchange rate has reached a high today of 1.9987.
UPDATE
The Pound Sterling to New Zealand Dollar exchange rate is currently trending in the region of 2.0065.
As the Scottish citizens make their decisions on the vote for independence the Pound is likely to be subject to increased volatility, which is reflected in the Pound to New Zealand Dollar exchange rate which has been highly changeable on Thursday morning.
Late on Wednesday evening the New Zealand Gross Domestic Product data was published. Yearly GDP was forecast to remain at 3.8% but the actual data saw a rise to 3.9%. Also the quarterly GDP saw a second quarter increase of 0.7% despite a market consensus of a 0.6% growth. This is still down from the previous figure of 1.0%, however.
