GBP/NZD Exchange rate Ticks up as Analysts Remain Confident in BoE rate Hike Next Month
The Pound New Zealand Dollar (GBP/NZD) exchange rate is ticking higher this morning, as a number of analyst suggest they remain confident the Bank of England (BoE) will raise interest rates next month.
At the time of writing the GBP/NZD exchange rate is currently up by nearly 0.2%, with the pairing likely to press higher if confidence in a May rate hike continues to build.
Pound (GBP) Exchange Rate Supported by Rate Hike Optimism
The Pound (GBP) exchange rate looks to rally at the start of this week’s session as a number of analysts appear confident that the BoE is still set to hike rates in May despite some dovish comments from Governor Mark Carney last week.
Carney was once again being compared to an ‘unreliable boyfriend’ last week as he appeared to walk back recent signals from the BoE that a rate hike was imminent.
While this caused market bets of a May hike to slump from 85% to 56%, some analysts appear to remain confident that the BoE will still raise rates next month, lending some support to the Pound exchange rate today.
Jordan Rochester, an analyst at Nomura suggests;
‘For the time being, and before all of the monthly data are in, we still on balance expect the MPC to raise rates next month. The MPC’s known reluctance to pre-commit may lead us to discount the importance of these comments.’
New Zealand Dollar (NZD) Exchange Rate Falls Back as USD Strengthens
At the same time the New Zealand Dollar (NZD) found itself sliding at the start of this week’s session, largely due to increased demand for the US Dollar (USD).
The uptick in USD has led to a notable decline in market risk appetite, which in turn has led to markets shunning the ‘Kiwi’.
This strengthening of the US Dollar exchange rate is attributed to the increased speculation surrounding the Federal Reserve’s path for interest rate hikes, with expectations of an acceleration in monetary tightening underpinning demand for USD.
GBP/NZD Exchange Rate Forecast: Sterling to Slide as UK Growth Slows?
Looking ahead the GBP/NZD exchange rate is likely to face some selling pressure again later this week as the UK publishes its latest growth figures.
Economists forecast that a preliminary reading of GDP will reveal UK economic growth slowed from 0.4% to 0.3% in the first quarter, likely prompting the Pound to retreat again.
Meanwhile the New Zealand Dollar may also struggle this week if the latest domestic trade figures show New Zealand’s trade surplus narrowed in March as expected.
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