The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate strengthened by around 0.46% on Thursday morning.
The Pound has all but recovered losses from Wednesday’s dovish Bank of England (BoE) Inflation Report thanks to better-than-expected house prices in April. With an absence of any more domestic data to curb the trend, Sterling is likely to continue trending higher versus most of it major peers.
The New Zealand Dollar, meanwhile, edged lower during Thursday’s European session after having rallied significantly during the Australasian session. The ‘Kiwi’ (NZD) advance was the result of the weak US Dollar and positive results from domestic data.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trending in the region of 2.0996.
Yesterday…
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate softened by around -0.75% on Wednesday afternoon.
After the Bank of England (BoE) Inflation Report showed that the central bank cut the growth forecast for the year, the Pound softened versus the majority of its most traded currency competitors. Even impressive jobs data wasn’t enough to overshadow the inflation report.
The New Zealand Dollar, meanwhile, strengthened versus many of its major peers thanks to a weak US Dollar. Additional gains can be attributed to speculation that the Reserve Bank of New Zealand (RBNZ) will avoid cutting rates during the next policy meeting by tightening lending for Auckland property investors. Gains have been somewhat slowed, however, after RBNZ Governor Graeme Wheeler reiterated the view that the ‘Kiwi’ (NZD) is overvalued.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trending in the region of 2.0982.
Pound Sterling (GBP) Exchange Rate Forecast to Soften versus the Euro despite Positive Labour Data
British economic data printed positively on Wednesday. Jobless Claims Change, Unemployment Rate, Claimant Count Rate and Average Weekly Earnings all either equalled or bettered market consensus figures. ‘Today we see further proof the plan is working with unemployment falling, record numbers of people in work and confirmation that regular pay packets are growing at their fastest in four years, putting more in people’s pockets and stretching family budgets that bit further,’ said Chancellor of the Exchequer George Osborne.
However, the impressive data results weren’t enough to overshadow the Inflation Report, which showed that the BoE cut the year’s growth forecast from 2.9% to 2.5%. ‘Today’s report should leave nobody in any doubt about the fundamental role of productivity growth in the UK economy’s performance,’ said Aberdeen Asset Management chief economist Lucy O’Carroll. ‘The Bank of England has downgraded its growth outlook, and Mark Carney has put poor productivity right at the centre of the story.’
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate dropped to a low of 2.0922 today.
New Zealand Dollar (NZD) Exchange Rate Forecast to Strengthen versus the Pound on US Dollar Weakness
After yet more disappointing economic data pertaining to North America, the US Dollar softened versus the majority of its most traded currency competitors. This saw heightened demand for high-yielding assets such as the ‘Kiwi’.
Additional New Zealand Dollar gains can be attributed to the RBNZ’s decision to tighten rules for lenders in the Auckland market. If the tactic manages to burst the housing bubble, the central bank may avoid cutting rates during the next policy meeting. ‘Prices in the Auckland region have become very stretched, increasing the risk of financial instability from a sharp correction in prices,’ Governor Wheeler said. The RBNZ wants ‘to improve the resilience of the banking system to a potential downturn in the Auckland housing market.’
The ‘Kiwi’ advance has been somewhat slowed, however, after Wheeler reiterated the bank’s view that the New Zealand Dollar is unjustly overvalued and hurting domestic growth.
Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate Forecast to Hold Losses ahead of New Zealand’s Manufacturing and Retail Sales Data
With a lack of economic data to curb the trend, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is likely to hold losses for the remainder of Wednesday’s European session. Thursday’s Australasian session could see GBP/NZD movement, however, with New Zealand’s Performance of Manufacturing Index and Retail Sales data due for publication.
Thursday could see heightened GBP/NZD volatility with China’s Foreign Direct Investment and UK House Price Balance data due for release.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate reached a high of 2.1274 today.
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