Although the UK’s annual manufacturing and industrial production measures printed above expected levels on Tuesday, the Pound maintained a slightly weaker relationship with the New Zealand Dollar.
The Pound to New Zealand Dollar exchange rate spent much of the European session down by 0.2 per cent in spite of some slightly disappointing manufacturing reports for New Zealand.
The manufacturing activity index for the first quarter showed that the pace of production in New Zealand slowed considerably from the fourth quarter of 2013.
The nation’s manufacturing activity rose by just 0.6 per cent in the first three months of 2014, following negatively revised expansion of 6.0 per cent in the final three months of last year.
Manufacturing activity volume was up 0.5 per cent on the quarter in Q1, also down on Q4’s 5.4 per cent increase.
Despite this slackening in the pace of manufacturing activity, the impressive performance of New Zealand’s construction and services reports are causing some economists to reconsider their growth forecasts.
In the opinion of economist Michael Gordon; ‘The weight of evidence suggests that March quarter GDP growth is likely to come in higher than our initial forecast of 1.1 per cent. Last week’s construction figures were massively stronger than expected, more than offsetting this week’s wholesale trade and manufacturing surveys, which on the whole were a little softer than we had assumed.’
Meanwhile, New Zealand’s ANZ Truckometer declined by 2.1 per cent in May, month-on-month. The measure had climbed by 1.2 per cent in April.
Although the New Zealand Dollar closed the local session in a stronger position against the Pound, the ‘Kiwi’ slid against the US Dollar amid speculation that a Federal Reserve interest rate increase could be on the horizon.
Yesterday St Louis Federal Reserve Bank President James Bullard intimated that should the US economy continue to show signs of improvement interest rates could be increased sooner rather than later.
As European trading progressed the GBP to NZD pairing was little affected by a UK report showing the strongest pace of annual expansion in industrial production since 2011.
Of course the New Zealand Dollar continues to derive underlying support from the belief that the Reserve Bank of New Zealand will increase interest rates when it meets later this week.
Later today New Zealand’s retail card spending figures will be published. A 0.5 per cent increase is expected.
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,0.8507,
New Zealand Dollar,,Euro,0.6272,
New Zealand Dollar,,Australian Dollar,0.9091,
New Zealand Dollar,,Pound Sterling,0.5069,
US Dollar,,New Zealand Dollar,1.1748,
Euro,,New Zealand Dollar,1.5978,
Australian Dollar,,New Zealand Dollar,1.0998,
Pound Sterling,,New Zealand Dollar, 1.9731,
[/table]
Comments are closed.