GBP/NZD Conversion Rate Predicted to Surge despite BoE Uncertainty
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate rallied by around 0.7% on Monday afternoon.
Despite the fact that there is growing uncertainty regarding the timing of a Bank of England (BoE) interest rate hike the Pound advanced versus its major peers on Monday. With BoE policy changes closely linked to the timing of a Federal Reserve rate hike, at least in accordance with traders, market uncertainty has seen comparatively subdued trade of late. Thursday’s BoE interest rate decision is likely to provoke Sterling volatility, however, although traders will probably show reluctance to invest heavily in the British asset ahead of the news.
Monday’s Sterling appreciation can be linked to better-than-expected domestic data. The Markit Manufacturing PMI for October was predicted to cool from the positively revised previous figure of 51.8 to 51.3, but the actual result advanced to 55.5. Analysts are uncertain whether this was a one –off result, however, so the data is unlikely to have a significant impact on BoE rate decisions as yet. A consistent reading in November’s manufacturing gauge will have a greater impact on rate hike bets, however.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trending in the region of 2.2892.
NZD/GBP Conversion Rate Predicted to Dive after Chinese Stock Values Drop
After data out of China produced mixed results erring towards negativity, demand for the New Zealand Dollar dampened. Of particular disappointment was October’s Chinese Manufacturing PMI which failed to move out of contraction territory as had been predicted. This weighed on stock values and the Shanghai Composite Index ended the Asian session 1.7% lower.
ANZ bank announced predictions that the Reserve Bank of New Zealand (RBNZ) will cut the cash rate in December, although this consensus is not shared by many. In accordance with ANZ; ‘In the aftermath of the RBNZ’s decision to keep the OCR on hold at 2.75%, we have once again found ourselves out of consensus on our views for the monetary policy outlook from here – as we were in May and June. But this is not because we think that the easing cycle is over; far from it. With growth still subtrend (albeit stabilising) and inflation low (and the high NZD delaying the return of inflation to 2%), one further 25bp cut in the OCR to 2.5% remains our base case.’
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate dropped to a low of 2.2732 during Monday’s European session.
Pound Sterling to New Zealand Dollar Forecast: BoE ‘Super Thursday’ to Provoke Sterling Changes
Market focus will be dominated by ‘Super Thursday’ which is the term relating to the publication of several influential British ecostats from the central bank. Not only will the Monetary Policy Committee (MPC) make their interest rate decision, but the meeting minutes will be published simultaneously. In addition, the BoE will release the Inflation Report. Whilst the MPC is not expected to move on rates at this time, the minutes and inflation report will be very likely to provoke Pound movement. Sterling trade is likely to be subdued ahead of ‘Super Thursday’ however, which could see the GBP/NZD exchange rate weaken.
Tuesday will be significant for those invested in the New Zealand Dollar with third-quarter Unemployment Rate data due for publication. Unemployment has been forecast to rise from 5.9% to 6.0%.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate climbed to a high of 2.2993 during Monday’s European session.
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