New Zealand’s Finance Minister Bill English may be advocating a weaker New Zealand Dollar, but at the moment he certainly isn’t getting one.
The New Zealand Dollar to Pound Sterling exchange rate was trading in the region of 0.5212 as of 09:50 am GMT
Overnight the commodity-driven asset rallied against peers like the Pound and US Dollar as unexpected news, both at home and away, lent the ‘Kiwi’ support.
Earlier this week New Zealand’s Associate Finance Minister Steven Joyce asserted that the nation’s economy probably shrank in the second quarter.
However, a report published last night actually showed growth of 0.2 per cent quarter-on-quarter.
Growth in the first quarter was also upwardly revised to 0.4 per cent.
Year-on-year the economy expanded by 2.5 per cent, more than the 2.3 per cent growth expected.
Given that the Reserve Bank of New Zealand has intimated that it intends to raise interest rates next year, this is particularly positive news.
The surprising growth was largely the result of a surge in construction activity.
According to senior economist Michael Gordon; ‘Aside from drought-induced volatility, the New Zealand economy is firmly in the grip of a widespread upturn. The driving forces are the Canterbury construction boom and rising house prices.’
The NZD/GBP exchange rate hit a high of 0.5224 pence per Dollar
This result, coupled with the Federal Reserve’s shocking decision to maintain bond-buying at 85 billion Dollars, saw the New Zealand Dollar surge to a four-month high against its US counterpart and rally against rivals like the Pound and Yen.
During the European session the NZD/GBP pairing was able to extend gains as UK retail sales growth slowed by more-than-forecast, slightly knocking the Pound.
In response to the ‘Kiwi’s climb, Sydney based economist Besa Deda noted; ‘Given that markets were widely anticipating a tapering and that hasn’t happened, and they seem to be less committed about when tapering will happen, you saw an immediate reaction in equity, bond, commodity and currency markets.’
The Australian Dollar also posted notable gains against weakening safe-haven currencies like the ‘Greenback’ and Yen, although speculation surrounding a Reserve Bank of Australia rate cut limited movement in the AUD/USD pairing slightly.
Current New Zealand Dollar (NZD) Exchange Rates:
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The New Zealand Dollar/US Dollar Exchange Rate is currently in the region of: 0.8414 >
The New Zealand Dollar /Euro Exchange Rate is currently in the region of: 0.6212 >
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5212 >
The New Zealand Dollar /Australian Dollar Exchange Rate is currently in the region of: 0.8844 >
The US Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.1905 <
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9185 <
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6115 <
The Australian Dollar/New Zealand Dollar Exchange Rate is currently in the region of: 1.1320 <
The Canadian Dollar/New Zealand Dollar Exchange Rate is currently in the region of: 1.1799 >
(Correct as of 09:50 GMT)
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