The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate fell by more than 1.0% on Monday as the stress of Scotland potentially leaving the UK put the Pound under intensive pressure.
With the referendum due to be held in just ten days time, YouGov published the shocking results of its latest survey.
In a twist few UK politicians had foreseen, the percentage of people voting in favour of leaving Britain has now outstripped the percentage in favour of Scotland remaining part of the union.
51% of the survey’s participants voted for independence.
The result saw YouGov comment; ‘Seldom has the term ‘knife-edge’ carried such lethal force. A two-point gap is too small for us to call the outcome. But the fact that the contest is too close to call is itself remarkable, as Better Together seemed to have victory in the bag. Month after month, they held a steady lead, averaging No 58%, Yes 42%. In the past four weeks support for the union has drained away at an astonishing rate. The Yes campaign has not just invaded No territory, it has launched a blitzkrieg.’
The report pushed the Pound lower against peers like the New Zealand Dollar, Australian Dollar, Euro and US Dollar.
The GBP/NZD exchange rate hit a low of 1.9360.
The New Zealand Dollar even held a stronger position against the Pound after NZ Finance Minister Bill English asserted that he believes the ‘Kiwi’ will continue to soften as the US economy regains strength.
The NZD/USD exchange rate fell to a six-week low against the US Dollar as the price of dairy, New Zealand’s main export, fell yet again and bets that the Reserve Bank of New Zealand will leave interest rates on hold at the upcoming gathering took a toll.
While China’s upbeat trade balance report did go some way to bolstering the commodity-driven New Zealand Dollar, English highlighted the ‘downside risks’ posed to the domestic economy by faltering dairy prices and stated; ‘One thing that has become clearer is there’s a bit less inflationary pressure than we might have expected given the growth we’ve had up to now. In the end it’s the Governor’s [RBNZ Governor Graeme Wheeler] view that matters.’
Over the weekend New Zealand published its Manufacturing Activity report for the second quarter.
Activity fell by -1.9% in the second quarter of the year following an increase of 0.6% in the first three months of 2014.
Pound Sterling to New Zealand Dollar Weekly Forecast
The GBP/NZD exchange rate is likely to continue trending on the back foot for the rest of the European session.
Overnight movement in the Pound to New Zealand Dollar pairing could be caused by New Zealand’s Card Spending figures, but investors will also be looking ahead to tomorrow and the publication of the week’s most influential UK reports.
The UK’s trade balance, industrial/manufacturing production figures and the NIESR GDP estimate for August could help the Pound recover today’s widespread losses if they surprise to the upside.
The Reserve Bank of New Zealand is due to deliver its interest rate decision on Wednesday.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trading in the region of 1.9382.
UPDATE
The Pound Sterling to New Zealand Dollar exchange rate is currently trending in the region of 1.9492.
The New Zealand Dollar to US Dollar exchange rate is currently trending in the region of 0.8262.
Tuesday has seen varied UK economic data results but with the overhanging anxieties surrounding the Scottish bid for independence, no amount of positive data could micrify those concerns. Year-on-year Industrial Production exceeded expectations of a 1.3% growth, printing at 1.7%. Manufacturing Production also printed positively having met with the forecast figure of 2.2%. However, Total Trade Balance was forecast to hit -2.459 billion but the actual result showed a huge declination to -3.348 billion.
The New Zealand Dollar has lost ground as demand for the US Dollar increases amidst speculation of a rate hike in the near-future. In general US labour market data has met with expectations and the Federal Reserve are running out of excuses not to tighten monetary policy.
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,0.8311,
New Zealand Dollar,,Euro,0.6424,
New Zealand Dollar,,Australian Dollar,0.8891,
New Zealand Dollar,,Pound Sterling,0.5047,
US Dollar,,New Zealand Dollar,1.2009,
Euro,,New Zealand Dollar,1.5564,
Australian Dollar,,New Zealand Dollar,1.1245,
Pound Sterling,,New Zealand Dollar,1.9383,
[/table]
