The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate was holding steady prior to the release of the UK’s Consumer Price Index for July.
Although the Pound had eased away from yesterday’s highs against the majority of its rivals overnight, the British currency was holding its own against the New Zealand Dollar as the asset came under pressure from domestic data.
The New Zealand Dollar eased lower against rivals like the US Dollar and Euro after New Zealand’s government revised its trade expectations and slashed its growth projections.
Back in May, the government anticipated that the nation would record a budget surplus of 372 million New Zealand Dollars in the year through June. This figure has now been cut to 297 million New Zealand Dollars.
In the following year a surplus of 1.26 billion New Zealand Dollars is now expected. 818 million New Zealand Dollars had been previously projected.
Growth forecasts for the nation were also reduced from expansion of 4% in the first quarter of 2015 year-on-year to growth of 3.6%.
Additionally, according to the survey conducted by the RBNZ, short-term inflation expectations are subdued. The survey commented; ‘Respondents were also asked what they believe quarterly CPI inflation will be for the current and next quarters. A quarterly percentage increase of 0.50% is expected for the September 2014 quarter (0.59% last survey), and 0.36% for the December 2014 quarter.’
While speaking to reporters, Finance Minister Bill English observed; ‘Now is certainly not the time to put New Zealand’s good progress at risk with more taxes and sharply higher government spending.’
The New Zealand Dollar fell to an almost two-month low against the US Dollar after the report was issued.
Separate New Zealand data showed that the nation’s Producer Price Inputs fell by -1% in the second quarter of the year, quarter on quarter, while Producer Price Outputs fell by -0.5%.
The GBP/NZD pairing was trading in the region of 1.9710, moving between a high of 1.9841 and a low of 1.9696.
However, the Pound Sterling to New Zealand Dollar exchange rate went on to plummet by over 0.3% following the publication of the UK’s Consumer Price Index.
It had been expected that the pace of UK inflation would slow in July, but the decline in consumer prices was more severe than anticipated.
On the month the consumer price index fell by -0.3%, taking the non-core Consumer Price Index to 1.6% from 1.9%.
A reading of 1.8% had been anticipated.
This result supports the Bank of England’s decision to keep interest rates on hold for the foreseeable future and caused widespread Pound losses.
Pound Sterling to New Zealand Dollar Weekly Forecast
As the week continues, further movement in the Pound Sterling to New Zealand Dollar exchange rate could be caused by the publication of minutes from the Bank of England’s latest policy meeting.
If the minutes show that even one member of the Monetary Policy Committee voted in favour of increasing interest rates the Pound could stage a rebound against its peers.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trading in the region of 1.9775.
GBP to NZD Exchange Rate Bolstered by New Zealand’s Falling Commodity Prices
The Pound Sterling to New Zealand Dollar exchange rate is currently trending in the region of 1.9778.
Following the dismal UK inflation data released yesterday; the Pound to ‘Kiwi’ (NZD) fell by around 0.3%. Both the Consumer Price Index and the Retail Price Index fell below expected levels and caused the Pound to slip against the majority of its peers.
This morning has seen the Pound firm up against the ‘Kiwi’ amid speculation that New Zealand’s economic growth, which has strengthened the currency this year, is waning. The speculation is such that the New Zealand Dollar has fallen against nearly all of its major peers this morning.
Yesterday the New Zealand Dollar fell following disappointing producer prices data and, perhaps more importantly, cuts to the government’s growth forecasts. The soft Producer Prices Inputs and Producer Prices Outputs data is linked to falling dairy prices. The result saw investors selling the ‘Kiwi’ amid fears that faltering commodity prices will have a detrimental effect on future inflation.
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,0.8442,
New Zealand Dollar,,Euro,0.6322,
New Zealand Dollar,,Australian Dollar,0.9044,
New Zealand Dollar,,Pound Sterling,0.5050,
US Dollar,,New Zealand Dollar,1.1847,
Euro,,New Zealand Dollar,1.5802,
Australian Dollar,,New Zealand Dollar,1.1047,
Pound Sterling,,New Zealand Dollar, 1.9775,
[/table]
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