Today’s UK month-on-month and year-on-year retail sales data caused the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate to fall to 2.33.
‘Kiwi’ (NZD) Rallies Today on Reserve Bank of New Zealand’s (RBNZ) Interest Cut, GBP/NZD Exchange Rate Slips
Yesterday’s Bank of England (BoE) meeting minutes initially did much to strength the Pound, sending the GBP/NZD currency pairing to a peak of 2.3807.
Speculation that the next session of the Monetary Policy Committee (MPC) would see at least two votes for an increase in interest rates inspired a round of hawkish trading in the wake of the otherwise expected result.
BoE Governor Mark Carney’s recent speech, alongside comments from other MPC members, certainly suggested that a rise could well be expected before the year is out.
Easing concerns over a potential Grexit have ultimately encouraged a generally optimistic outlook for the UK as the Eurozone is one of the nation’s main trading partners, which allowed the GBP/NZD pairing to continue running at a five-and-a-half year high throughout much of the day.
The ‘Kiwi’, however, was subject to a surprising pick-up last night in the wake of the Reserve Bank of New Zealand’s (RBNZ) decision to cut interest rates.
Slumping to 2.3508 the pairing continued to trend lower throughout the Australasian session, with defied expectations for a more severe cut buoying the New Zealand Dollar and helping the currency regain much of the ground it had lost earlier this week.
Nevertheless, the continuing downwards trend in global commodity prices still dogs the currency, holding it in a weaker position against the Pound in spite of these latest advances.
Today’s UK Retail Sales Depreciate Pound Sterling (GBP) against New Zealand Dollar (NZD)
This morning’s lower than expected month-on-month and year-on-year retail sales for the UK have prompted a further softening of the Pound against the ‘Kiwi’. Rates plunged to a low of 2.3313 in the immediate aftermath of the release.
The year-on-year figure registered at 4.0% as opposed to the predicted 4.5% and the month-on-month came in at -0.2% rather than a more positively envisioned 0.4%.
This drop in sales counteracts increased confidence in the UK’s economic recovery and it is feared that it could have an impact on the next BoE meeting and encourage a shift back towards a more dovish sentiment amongst many of the MPC’s members.
Declines have since been recorded across the board against the Pound’s peers, although one of its hardest falls has been against the New Zealand Dollar with a -0.81% movement.
Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate Forecast: UK’s Second Quarter GDP Report Likely to Trigger Further Movement
With the UK’s second quarter GDP report due out on Tuesday there is strong potential for movement amongst the currency’s various pairings.
Should the reading be positive and either meet or exceed the forecast 2.7% growth the Pound is highly likely to see a resurgence and recover its strength against the New Zealand Dollar. However a lower than expected result would be certain to chip away at the margin further.
Little significant activity is upcoming in the next week with regards to New Zealand’s fiscal matters thus the ‘Kiwi’ is unlikely to be the subject of any major movements.
As of writing the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate was trending in the region of 2.3394.
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