Despite trader anxieties increasing as the Scottish referendum draws ever closer; the Pound has made significant gains against the ‘Kiwi’ (NZD) after the weekend’s Chinese data compounded problems for the commodity-based currency.
The Pound Sterling to New Zealand Dollar exchange rate is currently trending in the region of 1.9978.
Following Reserve Bank of New Zealand Governor Graeme Wheeler’s assertions that interest rates will not be raised for a considerable amount of time; the New Zealand Dollar has struggled against the majority of its major competitors.
Sunday’s economic data pertaining to New Zealand has also contributed to ‘Kiwi’ losses. The Performance of Services Index registered a score of 57.9; a fall from the previous figure of 58.4.
Friday’s fresh polling data on the Scottish bid for independence, which indicated that those against a divided Britain held the majority vote, saw Sterling make slight gains against many of the majors. With the conclusion to the voting drawing ever nearer, however, expect Sterling to experience heightened volatility.
The Pound Sterling to New Zealand Dollar exchange rate has hit a low today of 1.9913.
Although not significant in terms of provoking wider market movement; Monday’s British economic data printed positively. The year-on-year Rightmove House Prices rose by 2.6% to 7.9% having increased by 3% in September.
Monday’s negative data from China has acted as a contributor to a weak ‘Kiwi’ Dollar. Year-on-year Industrial Production was expected to show an 8.16% growth but the actual data showed an unwanted declination to 6.9%. Yearly Retail Sales also failed to meet with the market consensus of 12.09% with the actual data resulting in 11.8% growth.
Volatility Forecast for the Pound to New Zealand Dollar Exchange Rate
With several important economic indicators in this week’s calendar there is a high likelihood of heightened currency market volatility.
A plethora of British domestic data on Tuesday is likely to provoke changes for the Pound. The most influential of these publications will be the Consumer Price Index, which is forecast to drop from 1.6% to 1.5%, and the Core Consumer Price Index which is expected to equal the previous figure of 1.8%.
Wednesday will be highly significant for both Sterling and the New Zealand Dollar. The Bank of England is due to publish their minutes from the most recent policy meeting. The minutes will be closely evaluated for any indication of the timing of future rate revisions.
New Zealand’s Gross Domestic Product data will be of marked interest to those invested in the ‘Kiwi’ Dollar. The second quarter yearly GDP is forecast to stay in line with the previous figure of 3.8%.
Wednesday will also see the Federal Reserve publish their rate decisions. Whether the result is dovish or hawkish it is likely to impact upon foreign currencies, especially commodity-based currencies such as the New Zealand Dollar.
As the coming days bring us closer to the decision on Scottish independence the Pound is very likely to experience heightened changeability. The result of the voting will have a huge impact on Sterling, and is likely to impact upon many of the major currencies.
