While the UK’s employment report topped estimates on Wednesday the Pound remained 0.23 per cent lower against the New Zealand Dollar.
Yesterday’s above forecast annual industrial/manufacturing production figures for the UK and positive growth assessment from NIESR failed to bolster the Pound against the New Zealand Dollar, and the pairing is still trending lower ahead of the Reserve Bank of New Zealand’s rate decision.
The ‘Kiwi’ is being supported by the expectation that the RBNZ will hike interest rates for a third time this year when they gather at 22:00 GMT and also advanced overnight thanks to stronger-than-anticipated domestic card spending figures.
A report showed that retail card spending in New Zealand increased by 1.3 per cent in May, month-on-month, following a positively revised increase of 0.4 per cent in April. Retail card spending was only expected to have risen by 0.5 per cent.
Meanwhile, card spending as a whole surged by 1.7 per cent last month, up from a decline of 0.2 per cent in April.
The New Zealand Dollar was higher against the Pound and US Dollar and achieved a three-week high against the Euro.
Other factors bolstering the South Pacific asset include a risk-on environment and upbeat global economic reports.
According to market strategist Kymberly Martin; ‘Strength in the New Zealand Dollar relative to its European peers was the most notable theme on the crosses overnight. All eyes will be on the RBNZ’s meeting tomorrow morning. We suspect the RBNZ will show sufficient commitment to its rate hiking process to extend the near-term bounce in the NZD/USD.’
However, during the European session the GBP to NZD pairing was able to ease away from a low of 1.9559 as investors had a mixed reaction to the UK’s jobs report.
While the headline unemployment number was very Pound-supportive, coming in below the five-year low of 6.7 per cent expected, sluggish wage growth pared Sterling’s gains.
The Office for National Statistics report showed that the UK added 345,000 positions in the three months to April, 75,000 more than expected. This meant that the nation’s unemployment rate printed at 6.6 per cent rather than the 6.7 per cent expected.
Jobless claims also fell by 27,400 in May, beating the 25,000 drop forecast.
However, the report went on to detail a lacklustre 0.7 per cent increase in average weekly earnings in the period. Economists had hoped for a 1.2 per cent climb in the three months to April.
Consequently the Pound, while climbing against the Euro and US Dollar, couldn’t quite come out on top against peers like the New Zealand and Australian Dollars.
If the RBNZ issues a rate hike today (its third for the year) the Pound could ease lower still against the New Zealand Dollar.
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,0.8566,
New Zealand Dollar,,Euro,0.6313,
New Zealand Dollar,,Australian Dollar,0.9109,
New Zealand Dollar,,Pound Sterling,0.5102,
US Dollar,,New Zealand Dollar,1.1697,
Euro,,New Zealand Dollar,1.5839,
Australian Dollar,,New Zealand Dollar,1.0970,
Pound Sterling,,New Zealand Dollar, 1.9609,
[/table]
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