While the Pound approached the end of the week in a stronger position against several of its most-traded currency counterparts, the GBP to NZD pairing was putting in a pretty mixed performance.
Sterling was little-changed yesterday after the Bank of England opted to leave interest rates and fiscal policy unaltered.
However, the Pound clung to most of its previous gains against the US Dollar and advanced to a 2 ½ year high against a broadly softening Euro.
On Friday the Pound was additionally boosted by the news that British factory output enjoyed its most rapid quarterly expansion for almost 15 years. In the first quarter of 2014, manufacturing production was up by 1.4 per cent.
On the month manufacturing production increased by 0.5 per cent rather than the 0.3 per cent anticipated. Meanwhile, industrial production fell by less than forecast in March, dipping by 0.1 per cent instead of 0.2 per cent.
After the British reports were published, Sterling extended gains against the Euro and US Dollar. The currency remained below 1.96 against the New Zealand Dollar.
The New Zealand Dollar might have been the victor in the GBP/NZD pairing, but the currency was in line to post a five-day decline of 1.3 per cent against its Australian counterpart on Friday.
Although the ‘Aussie’ fluctuated in response to disappointing domestic retail sales figures and less-than-impressive Chinese manufacturing reports, the commodity-driven currency strengthened as the week continued. Australia’s upbeat jobs data and China’s better-than-forecast trade figures gave the Australian Dollar a modest boost at the tail end of the week and the ‘Kiwi’ was left behind.
In reference to the NZD/AUD pairing one industry expert commented; ‘People are waking up to the fact that the Aussie economy is a little bit better than it looks. We expect the Kiwi/Aussie cross to continue to drift off.’
Although the New Zealand Dollar put on a valiant performance against the Pound overnight it did come under some pressure as a result of domestic retail card spending data.
Economists had expected the value of retail card spending to increase by 0.6 per cent in April but it actually only advanced by 0.3 per cent on the month.
General card spending was down by 0.4 per cent in April, month-on-month, following a drop of 0.2 per cent in March.
The figures prompted this response from economist Daniel Smith; ‘A slight pick-up in growth in the large consumables category is encouraging, but weakness in apparel spending continued in April. Consumer confidence is soaring and employment conditions are looking very good. But consumers are still cautious about taking on debt, and low wage growth is restraining purchasing power.’
The New Zealand Dollar also fluctuated as the RBNZ’s deputy governor Grant Spencer asserted that the central bank doesn’t intend to remove low-equity home lending restrictions until the end of the year.
Spencer also intimated that the RBNZ’s current path of increasing interest rates is dependent on the strength of the domestic currency.
Next week the New Zealand data to be aware of includes the nation’s REINZ house sales report, food price figures, retail sales excluding inflation and business of performance manufacturing index.
Releases from China, the US and the UK will also be of interest.
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,0.8642,
New Zealand Dollar,,Euro,0.6250,
New Zealand Dollar,,Australian Dollar,0.9238,
New Zealand Dollar,,Pound Sterling,0.5109,
US Dollar,,New Zealand Dollar,1.1567,
Euro,,New Zealand Dollar,1.6000,
Australian Dollar,,New Zealand Dollar,1.0834,
Pound Sterling,,New Zealand Dollar, 1.9579,
[/table]
Comments are closed.