Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate – little moved as Ukraine tensions ease

Pound to New Zealand Dollar exchange rate chart

The New Zealand Dollar recovered some ground against the Pound and climbed to a four-day high against the US Dollar as the markets took the ending of a Russian military exercise as a sign that tensions could be easing in Ukraine.

Along with other perceived riskier assets the ‘Kiwi’ recouped losses against several peers after Interfax reported that Russia ended military exercises in the west of the country as scheduled. The move caused some economists to suggest that crisis has been overdone and that the risk of war is not as high as first thought.

Against the Russian Ruble the New Zealand Dollar touched a record high over night as the Russian currency plunged after the USA and its allies threatened to impose economic sanctions upon Russia.

“Uncertainty surrounding the situation in the Ukraine remains high,” Kymberly Martin, markets strategist at Bank of New Zealand, said in a note. “The Russian ruble has dropped to all-time lows.”

Against its Australian relation the currency pared its losses after the Reserve Bank of Australia kept interest rates at the record low level of 2.5%. The Australian currency weakened after RBA policy makers said that the ‘Aussie’ was still too high.

The RBA announcement comes a week before New Zealand’s central bank reviews monetary policy at a meeting that’s expected to see the first hike in a tightening cycle as Governor Graeme Wheeler looks to head off the threat of future inflation.

The ‘Kiwi’ could push higher if the Ukrainian situation is resolved without bloodshed but as tensions remain high it could go either way.

Sterling is likely to push higher if today’s construction PMI report comes in better-than-expected. With little in the way of key economic data today we can also expect trade to relatively quiet.