British Pound (GBP) Exchange Rate Forecast to Soften against the ‘Kiwi’ (NZD) after UK Construction Growth Disappoints
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate declined by around -0.4% on Wednesday afternoon.
The British asset depreciated versus the majority of its most traded currency rivals during Wednesday’s European session. The downtrend can be attributed to less-than-ideal domestic data. The UK Construction PMI was forecast to advance from 57.1 to 57.5 in August, but the actual result only reached 57.3. The disappointing construction output was linked to a lack of skilled workers within the sector. The workers that do have the correct skills can afford to charge high wages due to scarcity.
Tim Moore, Senior Economist at Markit and author of the Markit/CIPS Construction PMI, said; ‘UK construction companies remained on a reasonably strong growth footing in August, helped by a sustained recovery in both residential and commercial building activity. Meanwhile, there was another loss of momentum for civil engineering, which brought output growth within this sub-sector further below the multi-year highs seen in 2014. The construction sector maintained its position as a strong engine of job creation in August, as permanent staff numbers and sub-contractor demand both picked up over the month. However, the surge in construction workloads over the past two-and-a-half years has created substantial skill shortages across the sector, with survey respondents reporting ongoing staff recruitment difficulties this summer.’
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trending in the region of 2.4110.
New Zealand Dollar (NZD) Exchange Rate Predicted to Gain against the British Pound (GBP) on Global Dairy Trade Auction
Market sentiment improved significantly over the course of Wednesday’s European session after China’s government intervened in the equity market. Also bolstering trader risk-appetite is the fact that China’s markets will be closed until Monday for a national holiday which should ease some of the volatility seen in recent weeks. As a risk-correlated currency, the ‘Kiwi’ (NZD) advanced in response to improving market sentiment.
In addition to traders seeking high-yielding assets, the New Zealand Dollar rallied thanks to rising dairy prices. The most recent Global Dairy Trade auction saw volumes decrease which caused prices to rise. However, there is still much concern regarding dampened demand from China and the long-term effect that will have on New Zealand’s exports.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate dropped to a low of 2.4016 during Wednesday’s European session.
Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate Forecast to Hold Losses ahead of UK Services PMI
Given the absence of further domestic data publications to provoke changes, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is likely to hold losses for the remainder of Wednesday’s European session. New Zealand’s Value of All Buildings data is unlikely to be particularly impactful.
Thursday is likely to see considerable GBP/NZD volatility with UK Services data due for publication. The services sector accounts for the majority of British Gross Domestic Product so the publication will hold significant weighting economically.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate climbed to a high of 2.4216 during Wednesday’s European session.
Comments are closed.