The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate advanced by around 0.69% on Tuesday morning.
Although British sales data failed to meet with the median market forecast, the Pound strengthened versus many of its major peers. The appreciation can be attributed to expectations that the quantitative easing program in the Eurozone will be beneficial for the British economy.
The New Zealand Dollar, meanwhile, dived versus most of its major rivals after environmentalists threatened to poison infant formula in an attempt to halt the use of agricultural poison on pests. As the world’s largest dairy exporter, the threats had a massive impact on prices.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trending in the region of 2.0721.
Pound Sterling (GBP) Exchange Rate Strengthens despite Poor Sales Data
February’s BRC Like-For-Like Sales gained by 0.2% on the year; equalling the previous figure but failing to meet with the market consensus of 0.5% growth.
‘It’s surprising more consumers aren’t treating themselves to a new pair of shoes, or curtains for the home,’ said David McCorquodale, at survey sponsor KPMG, in a statement. ‘One suspects that restaurateurs, not retailers, are benefiting from the extra cash in consumers’ pockets resulting from fuel price savings.’
The main reason behind the Sterling appreciation is the launch of quantitative easing in the Eurozone. As Britain’s largest trading partner, the QE is seen as beneficial to the UK.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate has fallen to a low of 2.0575.
New Zealand Dollar (NZD) Exchange Rate Dives on Dairy Prices
The New Zealand Dollar was also pressured lower as environmentalists, although some would describe them as terrorists, made threats to New Zealand’s dairy industry. In an attempt to prevent the use of agricultural poisons on pests such as rats and possums, environmentalists threatened to poison infant formula milk. This caused dairy prices to fall as demand for the product dampened considerably.
‘Whilst there is a possibility that this threat is a hoax, we must treat the threat seriously and a priority investigation is underway,’ the police deputy commissioner, Mike Clement, said in a news release.
‘We are confident that New Zealand infant and other formula is just as safe today as it was before this threat was made,’ said the ministry’s deputy director general, Scott Gallacher. ‘People should keep using it as they always have.’
Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate Forecast to Hold Gains
Until more is known about the threat on the dairy industry, the ‘Kiwi’ (NZD) is likely to continue to trend lower. Therefore, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is likely to hold gains for the remainder of Tuesday’s trade. There is the possibility of Sterling volatility on Tuesday afternoon, however, with Bank of England (BoE) Governor Mark Carney due to make a speech at the House of Lords.
Wednesday ought to see heightened GBP/NZD volatility with the Reserve Bank of New Zealand (RBNZ) policy decision due for publication, in addition to the British Gross Domestic Product Estimate.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate reached a high today of 2.0744.
