The Pound New Zealand Dollar (GBP NZD) exchange rate softened overnight on Tuesday following an unexpected fall in New Zealand’s Unemployment Rate.
According to Statistics New Zealand the domestic jobless rate fell from 5.2% to 4.9% in the first quarter, reaching its best levels since the end of 2008 and shocking economists who had predicted that unemployment would remain unchanged.
Oddly enough however is that statistics show that only men saw a rise in employment, with the unemployment rate amongst women holding steady at 5.7% as the 83,000 new women entering the workforce more than offset a 10,000 rise in the number finding employment.
More worrying for investors however was the accompanying wage data that reported that wages grew only 1.5% over the last 12 months, against a rise of 2.2% in inflation over the same period, meaning that most households experienced a real cut in wages last year.
Meanwhile the Pound rallied on Wednesday morning as the UK released an impressive Construction PMI.
IHS Markit reported that the UK construction sector grew from 52.2 to 53.1 in April, beating expectations that it would slide to 52.0 and showing its fastest pace of growth in 2017, thanks to increased demand from civil engineering projects and residential property growth.
The rise also comes despite concerns over the impact of Brexit on firms’ ability to hire skilled labour from the continent, for which the sector is reliant.
Duncan Brock, of the Chartered Institute of Procurement & Supply said;
‘Employment growth rose to its highest since May 2016, though continued disquiet about the lack of highly-skilled labour availability persisted and which must be addressed if the future strength of the sector is to be assured.’
Looking ahead the GBP NZD exchange rate may retreat again on Thursday following the release of the UK’s latest services data as economists predict that Britain’s private sector will have slowed from 55.0 to 54.5 in April, although Sterling could rise should it perform similarly well to the manufacturing and construction PMI’s.
Meanwhile the New Zealand Dollar May struggle to advance over the next week due to a lull in notable data, with the next major economic indicator scheduled to be the Reserve Bank of New Zealand’s (RBNZ) rate decision next Wednesday.
Current Interbank Exchange Rates
At the time of writing the GBP NZD exchange rate was trending around 1.86 and the NZD GBP exchange rate was trending around 0.53.
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