Risk of GBP/NZD Exchange Rate Decline on Slowing UK Trade Activity
The Pound (GBP) has traded in a narrow range against the New Zealand Dollar (NZD) today, hitting a level of NZ$1.9286 on the GBP/NZD exchange rate.
This lack of definitive movement comes from a mix of positive UK data and negative sentiment, which has balanced out demand for the Pound.
The former data was July’s government borrowing figure, which revealed the biggest budget surplus in 18 years.
Less supportively, NHS managers have warned that a no-deal Brexit could lead to shortages of essential medicines in the UK.
Looking ahead, the Pound’s recent losses against the New Zealand Dollar could grow on Thursday if the morning’s Confederation of British Industry (CBI) data disappoints.
This will be a distributive trades reading for August and is expected to show a slowdown from 20 points to 13; this figure measures the health of the UK retail sector.
A positive reading means that the sector is growing, but a forecast-matching decline could still weaken the Pound because it indicates a slowdown.
GBP/NZD Exchange Rate Outlook: Will UK Consumer Confidence Reading Drag Pound Sterling Lower?
Looking ahead, the Pound (GBP) is in danger of making additional losses when a GfK consumer confidence measure comes out on 31st August.
This is set to show another negative reading for consumer sentiment levels, with a shift from -10 points to -9.
While this would technically be an improvement, such a slowdown could still lower demand for Pound Sterling.
New Zealand Dollar to Pound Sterling (NZD/GBP) Exchange Rate Gains Possible on NZ Retail Sales Growth
The New Zealand Dollar (NZD) could advance against the Pound (GBP) in the near-future, as this evening’s NZ retail sales figures might boost NZD demand.
Covering Q2 2018, these figures are predicted to show an acceleration in the pace of sales growth for the quarterly and annual readings.
Such results are unlikely to raise hopes for a near-term Reserve Bank of New Zealand (RBNZ) interest rate hike, but could still push the NZD/GBP exchange rate higher.
Will Growing NZ Trade Deficit Trigger NZD/GBP Exchange Rate Losses?
Looking beyond today’s NZ retail sales figures, the New Zealand Dollar to Pound (NZD/GBP) exchange rate could also be affected by this week’s NZ trade balance data.
Out on 23rd August, this is expected to show an expansion of the existing deficit with a shift from NZ$-113m to NZ$-400m.
New Zealand’s trade balance reading often fluctuates between the deficit and surplus range, but the last surplus period only lasted for two months.
News of two months of deficit readings might drain NZD trader confidence, leading to late-week New Zealand Dollar to Pound (NZD/GBP) exchange rate losses.
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