British Pound (GBP) Exchange Rate Declines against the ‘Kiwi’ (NZD) on Poor British Labour Data
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate softened by around -0.7% on Wednesday afternoon.
Wednesday’s UK jobs figures largely fell short of expectations, despite forecasts for fairly pessimistic employment change and average earnings numbers. Of particular disappointment was unemployment which increased by 25,000 between April and June. However, the number of British citizens claiming jobseekers allowance dropped beyond expectations. Although average wages rose by 2.4% in the three months through June, the figure was well below the median market forecast 2.8% wage growth and was down from the previous 3.2% result.
Stephen Timms MP, Labour’s acting Shadow Work and Pensions Secretary, said that the second monthly rise in unemployment is concerning. He adds: ‘With productivity stagnating, David Cameron and George Osborne must take bolder action to raise jobseekers’ skill levels to get more back into work. The rise in youth unemployment highlights a real danger that young people are being left behind. Ministers must urgently deliver more high-quality apprenticeships to give young people the skills they need to get a job and build a future.’
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trending in the region of 2.3598.
New Zealand Dollar (NZD) Exchange Rate Avoids Significant Depreciation as RBNZ Rate Cuts already Priced-In
Although the People’s Bank of China’s (PBoC) decision to intervene in the market in order to devalue the Yuan caused dampened demand for commodity currencies, the ‘Kiwi’ avoided as big a drop as its Oceanic counterpart on Wednesday. This is due to the fact that the potential drop in China’s demand for imports caused speculation that the Reserve Bank of Australia (RBA) will have to ease policy. However, the Reserve Bank of New Zealand (RBNZ) is already expected to ease policy amid tanking dairy prices so the PBOC intervention little affected the RBNZ’s plans.
‘The future path of the OCR will be driven by the flow of incoming data, our assessment of the economic outlook, and judgements as to what level of interest rates is needed to achieve the Bank’s price stability goal,’ Wheeler said in a speech to a business group. ‘But neither of those will happen if the Reserve Bank cuts the OCR by only another quarter percent or so.’
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate dropped to a low of 2.3551 today.
Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate Forecast to Hold Losses ahead of NZ Manufacturing Data
Given the lack of domestic data to provoke changes, in addition to concerns regarding the UK’s labour market, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is likely to hold losses for the remainder of Wednesday’s European session. With that being said, a steep US Dollar appreciation could cause the ‘Kiwi’ to decline.
In terms of influential domestic data, Thursday’s Australasian session will see the publication of New Zealand’s Performance of Manufacturing Index. Friday’s Australasian session has New Zealand’s Retail Sales ex Inflation data which may also cause New Zealand Dollar volatility. In terms of British data, Friday’s Construction Output data is most likely to provoke changes for the GBP/NZD exchange rate.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate reached a high of 2.4024 during Wednesday’s European session.
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