As the week draws to a close the Pound is maintaining a bullish relationship with the New Zealand Dollar.
Sterling may have faltered slightly after yesterday’s UK growth report failed to deliver a surprise to the upside, but the British asset re-established a firm footing against the ‘Kiwi’ during the Australasian session.
While risk-appetite was moderately improved by upbeat manufacturing figures from China and the US, the New Zealand Dollar suffered as a result of less-than-impressive domestic data.
A gauge of consumer sentiment for New Zealand fell in May, reflecting growing concerns regarding the Reserve Bank of New Zealand’s current rate-hiking cycle.
As ANZ economist Cameron Bagrie noted; ‘Higher interest rates are starting to bite. The latest dent in confidence has translated into a slowing in expected economic growth over the second half of 2014. This is hardly ringing alarm bells – it’s akin to moving from a gallop to a fast canter’.
The measure of consumer confidence slid to a seven-month low in May, with the ANZ index dropping from a reading of 133.5 in April to 127.6 this month.
The 4.4 per cent month-on-month decline wiped out the 1.1 per cent advance recorded in April.
The data showed that 10 per cent of respondents felt their circumstances had improved from a year ago (down from 13 per cent in April) while 27 per cent believed that brighter economic conditions were on the horizon (6 per cent less than recorded the previous month).
The steepest decline in confidence was among those considering making a major household purchase.
Earlier this week consumer confidence data for neighbouring Australia also showed a worrying drop in optimism.
A lack of pertinent UK news may restrain additional GBP/NZD movement in the hours ahead and with investors betting that the Bank of England will raise interest rates sooner rather than later, the Pound may hold gains over the weekend.
If you have an interest in the GBP/NZD pairing the main economic reports to be aware of next week include New Zealand’s trade balance figures, UK Nationwide house price/UK BBA loans for house purchase data, New Zealand’s business confidence index and the UK GfK consumer confidence survey.
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,0.8556,
New Zealand Dollar,,Euro,0.6271,
New Zealand Dollar,,Australian Dollar,0.9266,
New Zealand Dollar,,Pound Sterling,0.5075,
US Dollar,,New Zealand Dollar,1.1677,
Euro,,New Zealand Dollar,1.5931,
Australian Dollar,,New Zealand Dollar,1.0794,
Pound Sterling,,New Zealand Dollar, 1.9704,
[/table]
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