Although traders’ risk appetite is far from insatiable at the moment; better-than-expected Chinese data has seen the ‘Kiwi’ (NZD) advance against the Pound. Sterling, meanwhile, is struggling against bets of a delay to UK rate increases and is generally trending lower against the majority of its most traded currency competitors.
The Pound Sterling to New Zealand Dollar exchange rate is currently trending in the region of 2.0451.
Negative trader sentiment towards the tail end of last week caused the New Zealand Dollar to slump against its major peers. A report from the International Monetary Fund initiated the trader risk aversion strategies. The report indicated that the prolonged period of low interest rates has encouraged excessive risk taking on global markets which, in turn, could provoke a fresh financial crisis.
A slowdown in global economic growth and a country-specific recovery has tempered bets on the timing of rate revisions. Sterling declined against the majority of its rivals for that reason. This is in spite of the fact that the IMF suggested that it was the ultra-low rates which encouraged the risk taking.
Better-than-expected British trade balance data was overshadowed by poor construction data on Friday, compounding the Pound’s declination.
The Pound Sterling to New Zealand Dollar exchange rate has fallen to a low today of 2.0428.
Sunday’s New Zealand economic data was relatively mixed. Food Prices declined, House Sales advanced, the monthly House Price Index increased a little but the yearly House Price Index ticked lower.
On Monday the New Zealand Dollar rallied against many of its competitors after Chinese data printed positively. Year-on-year Exports were forecast to rise a little from 9.4% to 12.0%, but the actual result showed a jump to 15.3%. Also yearly Imports exceeded the market consensus of a rise from -2.4% to -2.0%, with the actual data advancing to 7%.
A declination in the Chinese Trade Balance hasn’t been enough to throw off the ‘Kiwi’ gains. The trade surplus was forecast to drop from $49.84 billion to $41.41 billion, but the actual result was a decline to $31.0 billion.
Forecast for the Pound to New Zealand Dollar Exchange Rate
On Tuesday the British inflation data will be published. This is of particular importance as a gauge of the British economy’s performance, especially as inflation is the principle hurdle preventing a bank rate increase. Those invested in the Pound will be hoping for a better correlation between inflation and wage growth.
In terms of New Zealand data there is very little to influence changes on Tuesday but the speech from the Reserve Bank of New Zealand Deputy Governor may have an impact on the South Pacific currency. Non Resident Bond Holdings may also provoke ‘Kiwi’ volatility.
The Pound Sterling to New Zealand Dollar exchange rate has climbed to a high today of 2.0580.
