- GBP makes small gains against NZD – Greater advances recorded elsewhere
- Sterling remains high thanks to political developments – PM Cameron on last day
- New Zealand Dollar rallies on the whole – Loss of confidence in USD raises NZD
- Theresa May to become PM tomorrow – NZ food inflation stat out tonight
The Pound has been a fairly steady option against the New Zealand Dollar lately, though in other pairings, the UK currency has outperformed itself due to high investor confidence.
The ‘Kiwi’ has also been faring well, with the majority of gains being brought about by a decline in the US Dollar’s appeal.
UK Economic News: Rapid Conservative Power Transition Supports Pound’s High Appeal
The Pound has been a safe option for the most part recently, thanks to yesterday’s quick-fire political developments seeing the value of Sterling shoot up across the board.
Among the gains recorded for the UK currency today have been advances of 0.3% against the New Zealand Dollar (GBP/NZD), 1.3% against the Hong Kong Dollar (GBP/KHD) and 1.4% against the United Arab Emirates Dirham (GBP/AED).
The cause for this overall positive performance has been political in nature; in a series of unexpected developments, Andrea Leadsom pulled out of the Conservative leadership contest yesterday morning, while in the afternoon, current Prime Minister David Cameron stated that remaining contender Theresa May would be in charge of the country by the end of Wednesday at the latest.
While rapid movements are often damaging for investor confidence, the fact that the UK has been accelerating towards having stable leadership in July instead of September has kept confidence in the Pound high.
When asked about when May’s should trigger Article 50 to leave the EU, Northern Ireland Secretary Theresa Villiers said:
‘I think we need a period to prepare our negotiating position and look at all the options, and I think have some informal negotiations with other European ministers. I’d certainly think another two or three months of informal discussions’.
New Zealand Dollar Advances against Peers as Confidence in the US Dollar Drops Off
While no major New Zealand domestic data has come out recently, the ‘Kiwi’ has nonetheless been able to make gains of 0.5% against the Euro (NZD/EUR) and 1% against the Chinese Yuan (NZD/CNY) and the US Dollar (NZD/USD).
The probable cause for the rise of the New Zealand Dollar has been the converse decline in the appeal of the US Dollar; this is thought to have come from a significant decline in the labour market conditions index change for June.
Actual items of economic news from New Zealand have been twofold and low-impact lately; a pair of salmon farms have been opened; while in Parliament Labour Leader Andrew Little has put forward plans to create an Affordable Housing Authority.
Future GBP, NZD Forecast: NZ Food Inflation due Tonight, BoE Surveys due Tomorrow
The last piece of domestic data due for the pairing today will come from New Zealand, in the form of the June food inflation figure on the year; this is forecast to reprint at -0.3%.
Ahead of Thursday’s Bank of England (BoE) interest rate decision, Sterling could be shifted tomorrow by the BoE’s surveys on UK credit conditions and bank liabilities, while a smooth transition from David Cameron to Theresa May as PM is expected to give the Pound a significant boost.
Current GBP, NZD Exchange Rates
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate was trending in the region of 1.8030 and the New Zealand Dollar to Pound Sterling (NZD/GBP) exchange rate was trending in the region of 0.5548 today.
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