With an absence of domestic data to curb the trend, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate has continued trending in a low position. The lack of correlation between British wages and inflation is weighing heavily upon the Pound, and with speculations rife that Wednesday’s Bank of England minutes will be dovish; it is unlikely that Sterling will make a speedy recovery.
The Pound Sterling to New Zealand Dollar exchange rate is currently trending in the region of 1.9703.
Earlier…
After domestic data from the world’s second-largest economy improved on median market forecasts, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate dived by around -0.21%. British inflation data, meanwhile, outstripped economists’ predictions, but the data has only compounded the Pound’s downtrend as rising inflation has negated improved wage growth.
The Pound Sterling to New Zealand Dollar exchange rate is currently trending in the region of 1.9698.
Sterling (GBP) Trending Lower despite Rising Inflation
As has become the norm in the British economy, there is a complete miscorrelation between wages and inflation. Sterling appreciated last week as a result of improved wages, with average earnings growth outstripping inflation for the first time in a long while. However, an improvement in Tuesday’s Consumer Price Index shows inflation to have risen, negating the gains made from higher wages. The Consumer Price Index was forecast to equal the previous figure of 1.2%, but the actual result increased to 1.3%.
‘Of course, the increase now wipes out last week’s wage improvement and tightens pressure on pockets heading into Christmas. Retailers will continue to cut prices heading into the festive period, until decent wage strength allows their margins some breathing room,’ stated Jeremy Cook, chief economist of World First.
The Pound Sterling to New Zealand Dollar exchange rate has dropped to a low today of 1.9615.
‘Kiwi’ (NZD) Climbs on China Data
A complete absence of domestic data will see the New Zealand Dollar subject to fluctuations in the foreign currency market on Tuesday. However, positive data out of China has initiated a ‘Kiwi’ uptrend. Chinese Foreign Direct Investment was forecast to drop from 1.9% to 1.1%, but the actual result only fell to 1.3%.
Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate Forecast to Decline
Given that the Pound has endured a bearish run for an extended period, it is unlikely that the GBP/NZD exchange rate will appreciate. This is especially true if traders begin voicing anxieties over a UK wage-inflation crisis. That being said, if tomorrow’s Bank of England meeting minutes show that the monetary policy committee remained divided on the subject of interest rate increases, the Pound could gain.
The Pound Sterling to New Zealand Dollar exchange rate has reached a high today of 1.9742.
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,0.7961,
New Zealand Dollar,,Euro,0.6362,
New Zealand Dollar,,Pound,0.5081,
New Zealand Dollar,,Australian Dollar,0.9134,
US Dollar,,New Zealand Dollar,1.2560,
Euro,,New Zealand Dollar,1.5718,
Pound Sterling,,New Zealand Dollar, 1.9680,
Australian Dollar,,New Zealand Dollar,1.0947,
[/table]
