The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate was trading over 0.25% higher on Monday as Sterling enjoyed a bullish run against the majority of its rivals.
The British asset was boosted as Bank of England Governor Mark Carney provided the market with yet more mixed messages regarding the time line for increasing interest rates from record lows.
A concerning average wage growth figure and pessimistic BoE inflation report left Sterling struggling last week, but with Carney intimating that rates could be increased before real wages recover the Pound rebounded.
During an interview with The Sunday Times, Carney also spoke of the growing divide between members of the Monetary Policy Committee on the subject of the timing of the first interest rate increase.
He was also cautiously upbeat when it came to the UK’s economic prospects.
Carney asserted; ‘The easy bit of the expansion has happened. Now we are coming to the tougher part where you ultimately have to see productivity pick up, real wages pick up, sustainable consumption and export competitiveness return. That’s what we are providing guidance for now. There are multiple headwinds for the British economy: a very weak Europe, the persistent strength of the Pound, continued fiscal consolidation which will subtract from growth and British households that are still heavily indebted, not least because they haven’t seen real wages increase.’
The GBP/NZD pairing was trading in the region of 1.9718, moving between a high of 1.9742 and a low of 1.9674.
The Pound Sterling to New Zealand Dollar exchange rate remained stronger even as New Zealand’s Performance of Services Index showed improvement.
Business New Zealand’s Performance of Services Index climbed from a positively revised 55.2 in June to 58.4 in July – pushing further above the 50 mark separating growth from contraction.
The result took the year’s average reading to 56.5.
In response to the report economist Craig Ebert observed; ‘This is consistent with output accelerating to an above-trend pace. It is little wonder, then, that service sector firms are looking to invest more in plant machinery and equipment while also intending to take on more staff.’
As New Zealand’s services sector accounts for over 60% of total economic growth, the result is certainly a positive one for the South Pacific nation.
The New Zealand Dollar was little-changed against its US counterpart as the ongoing tensions in Ukraine limited demand for higher-risk assets.
Pound Sterling to New Zealand Dollar Weekly Forecast
The main economic news for New Zealand to be aware of this week includes: Producer Price Inputs/Outputs, Reserve Bank of New Zealand 2-Year Inflation Expectation and ANZ Job Advertisements.
Fluctuations in the GBP/NZD exchange rate are more likely to be caused by UK news, including the nation’s inflation data.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trading in the region of 1.9717.
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,0.8480,
New Zealand Dollar,,Euro,0.6335,
New Zealand Dollar,,Australian Dollar,0.9103,
New Zealand Dollar,,Pound Sterling,0.5069,
US Dollar,,New Zealand Dollar,1.1793,
Euro,,New Zealand Dollar,1.5785,
Australian Dollar,,New Zealand Dollar,1.0981,
Pound Sterling,,New Zealand Dollar, 1.9726,
[/table]
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