The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate softened by around -0.66% on Wednesday morning.
After it was revealed that Bank of England (BoE) policymakers were unanimous in their decision to hold rates, the Pound slumped against nearly all of its major competitors. This is despite relatively positive domestic labour market data.
The New Zealand Dollar, meanwhile, also softened versus many of its major peers after inflation data showed consumer prices dropped beyond expectations.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trending in the region of 1.9672.
Pound Sterling (GBP) Exchange Rate Dives on Dovish Policymakers
Minutes from the most recent BoE policy meeting showed that all of the policymakers were united on holding the current benchmark rate. This is a break from the previous meetings where two of the officials dissented from the general consensus.
The minutes stated; ‘They noted the risk that low inflation might persist for longer than the temporary factors implied and concluded that this risk would be increased by an increase in Bank Rate at the current juncture.’
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate dropped to a low today of 1.9718.
New Zealand Dollar (NZD) Exchange Rate Softens on Inflation
Although a rally in Asian stocks was seen to support demand for high-yielding assets, the New Zealand Dollar (NZD) softened versus many of its major peers as a result of disappointing inflation data. The Consumer Price Index was forecast to drop from 1.0% to 0.9%, but the actual result was 0.8%.
Finance Minister Bill English said; ‘Over the last four years, the average wage has increased from around 49,500 to 55,500 NZ Dollars (37,778 to 42,357 US Dollars). Wages are expected to continue to outpace inflation, but if inflation remains low the dollar value of future wage increases may be smaller than previously expected.’
Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate Forecast to Trend Lower
Given the lack of data to provoke changes, and the mounting negative sentiment towards the BoE, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is likely to continue trending lower on Wednesday.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate reached a high today of 1.9878.
