The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate was trending within a narrow range on Tuesday afternoon.
After the UK’s economic data showed inflation remained steady at the record low 0.0% and core inflation declined, the Pound softened versus many of its most traded currency rivals. With the forthcoming general election weighing on investor confidence, the British asset is unlikely to sustain any advance until its conclusion in May.
The New Zealand Dollar, meanwhile, recovered some of the losses from weak trade data out of China thanks to improved housing data. The appreciation has been sluggish, however, with market sentiment significantly dampened amid tensions between Greece and Eurogroup officials.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trending in the region of 1.9641.
Pound Sterling (GBP) Exchange Rate Softens as Inflation Holds at Record low
With the general election fast approaching, investor confidence has dampened considerably. Opinion polls are giving very different results, there is no clear majority for either of the major parties and speculation is mounting that whoever gains victory will introduce a massive policy overhaul. All this has seen demand for the British asset cool considerably.
Aiding the Sterling downtrend was disappointing domestic data on Tuesday. March’s Consumer Price Index held at 0.0% on the year, a record-low which is hovering dangerously close to negative territory. In addition, March’s Core CPI showed only 1.0% growth on the year, failing to meet with the market consensus of 1.2% growth.
Joshua Raymond of City Index stated; ‘Clearly the UK remains on the cusp of deflation and this continues to put the Bank of England (BoE) between a rock and a hard place when it comes to hiking interest rates. The threat of deflation is pushing market views for the BoE’s first rate hike further out and whilst today’s inflation reading will do little to change current forecasts, there were some fears we could see a deflationary print today.’
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate dropped to a low of 1.9608 today.
New Zealand Dollar (NZD) Exchange Rate Edges Higher on House Prices
After Monday’s trade data out of China produced much weaker-than-expected results, the ‘Kiwi’ (NZD) softened versus the majority of its most traded currency rivals. The downtrend was exacerbated by dampened trader risk-appetite as geopolitics in Europe dominates trader focus.
Tuesday’s European session saw a fractional ‘Kiwi’ recovery, however, after domestic data produced positive results. March’s REINZ House Price Index advanced by 9.5% on the year, growing by 6.7% on the month. Additionally, REINZ House Sales increased by a massive 20.3% in March on the year.
‘The movement in the national median price is almost entirely an Auckland effect,’ said REINZ chief executive Colleen Milne. ‘The underlying demand pressures remain and supply continues to be restrained by low numbers of new listings.’
Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate Forecast to Hold Steady
Given the lack of influential data to curb the trend, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is likely to continue trending within a limited range over the remainder of Tuesday’s European session.
Wednesday ought to see GBP/NZD volatility cool with a complete absence of data from both Britain and New Zealand to provoke movement.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate reached a high of 1.9683.
