Last week’s disappointing US employment figures helped the New Zealand Dollar advance and the ‘Kiwi’ remains trading higher against both the ‘Greenback’ and Pound.
The smaller-than-forecast increase in US non-farm payrolls saw the US Dollar broadly soften.
The odds of the Federal Reserve keeping stimulus in place until the US labour sector shows more sustained signs of improvement also rose in response to the news, and higher risk assets like the New Zealand Dollar strengthened as a result.
In the view of industry expert Chris Hunter; ‘It just seems as though market expectations were overdone from a US Dollar strengthening perspective and as a result those positions have just unwound and the ‘Kiwi’ and ‘Aussie’ have both climbed back up.’
The New Zealand Dollar derived additional support overnight as a measure of domestic house prices increased by 8.8 per cent in March, year-on-year, following an annual increase of 9.3 per cent in February.
As it stands, the New zealand Dollar to US Dollar (NZD/USD) exchange rate remains just above 86 US cents.
Ahead of the publication of the UK’s Lloyds employment confidence figure the Pound to New Zealand Dollar (GBP/NZD) pairing was holding onto the modest losses sustained overnight.
However, the Pound received some support as a survey revealed that risk appetite among financial chiefs rose in the first quarter of this year to the strongest level since 2007.
An economist with Deloitte, who conducted the survey, asserted that ‘easy monetary policy and favourable financing conditions have created a capital-rich environment for big UK corporate. CFO’s are likely to draw down on that capital over the next year to fund expansion.’
80 per cent of those questioned envisage UK companies hiring more staff over the next twelve months.
Further GBP to NZD fluctuations could occur before the close of European trading as investors respond to New Zealand’s NZIER business opinion survey for the first quarter. The survey came in at 52 in the final quarter of last year and interested parties will be looking for an improvement on this figure.
As the week progresses, GBP to NZD movement may be driven by several economic reports for the UK and New Zealand.
Data to be particularly aware of includes the UK’s BRC shop price index, New Zealand card spending figures, New Zealand’s performance of manufacturing gauge, UK industrial/manufacturing production, UK RICS house price balance, the Bank of England’s rate decision and New Zealand’s housing price index.
As China is one of New Zealand’s main trading partners, trade balance and inflation figures for the former nation may also impact the ‘Kiwi’s performance.
New Zealand Dollar (NZD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
New Zealand Dollar,
,US Dollar,0.8603,
New Zealand Dollar,,Euro,0.6278,
New Zealand Dollar,,Australian Dollar,0.9269,
New Zealand Dollar,,Pound Sterling,0.5194,
US Dollar,,New Zealand Dollar,1.1631 ,
Euro,,New Zealand Dollar,1.5934 ,
Australian Dollar,,New Zealand Dollar,1.0789,
Pound Sterling,,New Zealand Dollar, 1.9261,
[/table]
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