New Zealand Dollar (NZD) Retreats as US Payrolls Data Encourages Odds of 2015 Fed Interest Rate Hike
As the US Change in Non-Farm Payrolls figure bettered forecasts the New Zealand Dollar (NZD) has been weighed down by the increased odds of a 2015 Fed interest rate rise. As such, the GBP/NZD exchange rate has rallied to trend in the range of 2.3131.
Earlier…
Despite the UK’s trade deficit having narrowed further than forecast today the GBP/NZD exchange rate remains in a persistent slump.
Pound Currency News: GBP in Sharp Slump Following Dovish Bank of England (BoE) Inflation Report
A particularly heavy blow was in store for the Pound (GBP) yesterday as the Bank of England (BoE) proved decidedly more dovish than traders had anticipated. The central bank’s Inflation Report was particularly cautious, with the two-year forecast for inflation dialled back to indicate that the 2% target will not be reached until the third quarter of 2017. With policymakers having voted 8-1 to leave interest rates unchanged at this juncture the likelihood of a near term increase was seen to diminish severely, indicating that another year could well pass without any move. This naturally disappointed pundits, who had been encouraged by a raft of strong October UK PMIs, and sent Sterling into a sharp downtrend against rivals.
The New Zealand Dollar (NZD) was quick to capitalise on this softness, extending its gains after Chinese stock markets and commodity values had rallied earlier in the morning.
Narrowed UK Trade Deficit Fails to Bolster Pound (GBP) Today, New Zealand Dollar (NZD) Extends Gains ahead of US Payroll Data
Although both the UK Manufacturing Production and Visible Trade Balance figures for September have printed more positively than expected today this has done little to shore up the GBP/NZD exchange rate. Domestic Industrial Production fell short of forecast, demonstrating continued weakening within the sector to indicate that the nation’s economy is not in a universal state of improvement. Despite the national trade deficit having narrowed further than anticipated to -9,351 billion Pounds there has remained little strong incentive for investors to buy back into the currency today.
As the Shanghai Composite has continued to be buoyed by a surge in bullish sentiment the ‘Kiwi’ has strengthened further against rivals on Friday. However, as the afternoon’s US Change in Non-Farm Payrolls report approaches the South Pacific currency has begun to soften. Traders are adopting a more cautious attitude, with markets prepared to move as the odds of a 2015 interest rate rise from the Fed are expected to come into greater clarity on the back of this latest US employment data.
GBP/NZD Exchange Rate Forecast: Pound Looking to Rally on Upcoming UK Employment Data
Into next week the ‘Kiwi’ could find support on the back of the October New Zealand Card Spending figure, as well as the domestic Manufacturing PMI. If the national economy does not show encouraging signs of growth, however, the New Zealand Dollar is likely to return to a downtrend.
UK data will be in rather limited supply, with the only particular rallying point for the Pound being Wednesday’s raft of employment data. Should Average Weekly Earnings and the ILO Unemployment Rate continue to demonstrate improvement, this could prove bullish enough to outweigh the disappointment of the BoE’s recent dovishness.
Current GBP, NZD Exchange Rates
At time of writing, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate was slumped in the region of 2.2921, while the New Zealand Dollar to Pound Sterling (NZD/GBP) pairing climbed in the range of 0.4361.
Comments are closed.