The Pound Sterling (GBP) has failed to improve its faring against the New Zealand Dollar (GBP/NZD) today despite the US Q2 GDP figures all meeting or exceeding estimates.
Unreliable ‘Greenback’ Reaction means UK GDP will be Deciding Factor is GBP/NZD Pairing
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate has remained negative since earlier, falling by -0.6% today. This comes in spite of the US Q2 GDP results coming in positive along with the US Personal Consumption figures. The news had no impact on the pairing, as the Pound has actually worsened against the ‘Kiwi’ despite milk prices dipping below $16.35 today as well.
As good news from the US clearly cannot be relied on to have its predictable effect, it instead falls to the UK Q2 GDP results to dislodge the Pound from its currently unfavourable position.
Earlier…
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate has remained down today, seeing a disadvantage of -0.5% against the ‘Kiwi’ (NZD) today.
Uncertainty Abounds as US GDP Results are Incoming
The Pound Sterling (GBP) has continued its illogical downtrend against the New Zealand Dollar (GBP/NZD) today, although compared to yesterday and Tuesday, the loss is the lowest of the three results. The Pound’s continuing negative performance against the ‘Kiwi’ (NZD) is particularly notable due to the price of milk falling once again this morning, dipping below $16.40 today. Despite this, the New Zealand Dollar has risen against all the competition, a sign that even after a fourth day of market unrest, things are not yet back to normal.
The pairing may be dislodged later today by the release of the US Q2 GDP data, which has been forecast optimistically. However, the ‘Greenback’ (USD) is still reeling from an almost definite confirmation by Fed officials that no US interest rate hike will occur in September, so even major US GDP gains may not have a discernible impact on the pairing.
Earlier…
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate has dived today as the world commodity currencies defied expectations and turned bullish.
GBP/NZD Exchange Rate News: Beneficial UK Results have Limited Effect in GBP Pairings
The Pound Sterling (GBP) has had a mixed bag of results today, diving against many currencies that Sterling would be expected to rise over, given the circumstances. These losses were mainly against commodity currencies: the Pound fell by -0.8% against the South African Rand (GBP/ZAR) and the Canadian Dollar (GBP/CAD) today and saw greater losses of over -1.1% against the New Zealand Dollar (GBP/NZD) and the Australian Dollar (GBP/AUD). The worst decline was by -1.6% against the Mexican Peso (GBP/MXN).
GBP rises included 0.7% against the Russian Ruble (GBP/RUB) and more than 1.1% against the Israeli New Shekel (GBP/ILS) and the Hungarian Forint (GBP/HUF).
Despite seeing major losses today, Oxford Economics have predicted that the UK would suffer a reduced impact compared to others if China’s economy continues to contract dramatically. The analyser foresaw that ‘A structural hit to Chinese growth would be a net negative to the UK, but less so than for many other economies’.
‘Kiwi’ Exchange Rate Powers Ahead Despite Stagnant Milk Prices and Expanding Trade Balance Deficit
The New Zealand Dollar (NZD) has been far more consistent than the Pound (GBP) today, seeing advances against all but the Australian Dollar (NZD/AUD). These rises include 0.5% against the Chinese Yuan (NZD/CNY) and the US Dollar (NZD/USD) and greater increases of 1% against the Pound Sterling (NZD/GBP) and 1.7% against the Euro (NZD/EUR).
This uptrend is unusual to say the least, as the price of New Zealand’s key export, milk, has flatlined since the second week of August and the Balance of Trade figure for July saw the country’s deficit expand from -NZ$194m to –NZ$649m. The nation was helped by the July Exports and Imports figures though; these rose by NZ$4.2bn and NZ$4.9bn respectively.
GBP/NZD Exchange Rate Forecast: Lack of NZ Releases mean GBP Rally Remains Possible
The Pound (GBP) has the potential to rise back against the ‘Kiwi’ (GBP/NZD) in the coming days by simple virtue of the next New Zealand data release taking place on Sunday. As positive US results cannot presently be relied on to drive the ‘Kiwi’ (NZD) down, the UK monthly Nationwide House Price Index for August, out on Thursday, and the UK annual Q2 GDP data on Friday are the big releases to watch out for.
Regardless of the results, Westpac Senior Economist Satish Ranchhod believes that a downtrend is on the cards for the ‘Kiwi’ anyway: ‘The New Zealand Dollar will provide some offset to the weakness in China and in some export prices, but nonetheless we do expect some tough times in the export sector as farmers adjust to those lower global prices’.
Current GBP, NZD Exchange Rates
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate was trending in the region of 2.4016 and the New Zealand Dollar to Pound Sterling (NZD/GBP) exchange rate was trending in the region of 0.4166 today.
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