After the Reserve Bank of New Zealand (RBNZ) released their financial stability report on Tuesday evening, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate dived by around -0.42%. Sterling, meanwhile, has gained against the majority of its other most traded currency competitors after UK wage growth improved beyond expectations.
The Pound Sterling to New Zealand Dollar exchange rate is currently trending in the region of 2.0280.
Sterling (GBP) Gains on Domestic Data
Wednesday morning’s British data have produced mixed results but err towards the positive. Perhaps most significantly, an improvement in wage growth has spurred a Sterling upsurge. Average Weekly Earnings eclipsed the median market forecast of a rise from 0.7% to 0.8%, with the actual result reaching 1.0%. In addition, the Average Weekly Earnings ex Bonus figure was forecast to rise from 0.9% to 1.1%, but the actual result advanced to 1.3%.
Given that the Bank of England has targeted improved wage growth as one of the prerequisites for monetary policy normalisation, the data will be well received by rate hawks.
The Pound Sterling to New Zealand Dollar exchange rate has dropped to a low today of 2.0208.
‘Kiwi’ (NZD) Surges on Financial Stability Report
In the aftermath of the RB NZ’s financial stability report, the ‘Kiwi’ has advanced against all of its major peers. The report sought to remind traders that the RBNZ are still in a tightening cycle and will continue to lift interest rates where necessary.
‘Governor Graeme Wheeler reminded people that we’re still in a tightening cycle when the market was trying to price it all out,’ said Imre Speizer, senior market strategist at Westpac Banking Corp in Auckland. ‘It gave the Kiwi a bit of a lift, and you can see that by the pull-back in the Aussie-Kiwi (cross rate).’
Pound Sterling to New Zealand Dollar Exchange Rate Forecast to Strengthen
With British wage growth such a key part of the BoE’s conditions for tightening monetary policy, the recent data is likely to allow the Pound to gradually strengthen during the day. Although the RBNZ financial stability report was positive, declination in the commodities market is likely to see the ‘Kiwi’ soften.
The Pound Sterling to New Zealand Dollar exchange rate has reached a high today of 2.0386.
UPDATE
GBP/NZD Exchange Rate Extends Losses on BoE Inflation Report
The Pound Sterling to New Zealand Dollar exchange rate is currently trending in the region of 2.0142.
After the Bank of England released a dovish inflation report, the Pound has slumped across the board. The report suggested that inflation could drop below 1% due to the sluggish growth in the Eurozone economy.
‘The economy has been picking up in the U.K., but in the last three months things have changed,’ Steven Major, global head of fixed-income research at HSBC Holdings Plc said in a Bloomberg Television interview in London before the report was released. ‘It looks like the rate hike will be later rather than sooner. The best place to be on the curve is five-year.’
GBP/NZD Exchange Rate Trending Lower on Delayed Rate Hike Bets
The Pound Sterling to New Zealand Dollar exchange rate is currently trending in the region of 2.0028.
As traders digested the dovish inflation report from the Bank of England, the Pound has generally depreciated against all of its major peers. The report has also fuelled speculation that the Bank of England will delay a rate increase for the foreseeable future.
‘It is appropriate that, while a tightening in monetary policy remains in prospect, markets now expect somewhat easier monetary conditions over the forecast period than was the case three months ago,’ Bank of England Governor Mark Carney told a news conference after the Bank released its quarterly Inflation Report on Wednesday.
GBP/NZD Exchange Rate Softens on UK Data
The Pound Sterling to New Zealand Dollar exchange rate is currently trending in the region of 1.9979.
On Thursday morning, the Pound has slumped against nearly all of its major peers after domestic data printed below expectations. The RICS House Price Balance was forecast to decline from 30% to 25%, but the actual result dropped to 20%.
The New Zealand Dollar, meanwhile, has enjoyed an upsurge due to a strong Performance of Manufacturing result, which increased from 58.5 to 59.3. Thursdays mixed results from economic data pertaining to New Zealand has had minimal impact compared with the manufacturing data.
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,0.7868,
New Zealand Dollar,,Euro,0.6321,
New Zealand Dollar,,Pound,0.4938,
New Zealand Dollar,,Australian Dollar,0.9034,
US Dollar,,New Zealand Dollar,1.2704,
Euro,,New Zealand Dollar,1.5818,
Pound Sterling,,New Zealand Dollar, 2.0243,
Australian Dollar,,New Zealand Dollar,1.1068,
[/table]
