After a day of limited data releases for New Zealand the ‘Kiwi’ closed Australasian trading little-changed against the Pound.
Although the South Pacific currency slipped slightly against the ‘Aussie’ following the release of upbeat housing and sentiment reports for Australia, the New Zealand Dollar was holding its own against the Pound ahead of today’s domestic card spending figures.
The New Zealand Dollar was slightly higher against the Pound and advanced on a broadly softening US Dollar ahead of Federal Reserve Chairman Janet Yellen’s address to lawmakers.
In the opinion of senior FX trader Michael Johnston; ‘The Australian data was pretty strong. It made the market think there’s little chance of any near term rate cut by the Reserve Bank of Australia and it has caused the Australian Dollar to be squeezed up, dragging the Kiwi along with it.’
In other ‘Kiwi’ news, Westpac economists have forecast that an upbeat economic outlook for New Zealand and the inevitability of the nation’s Reserve Bank increasing interest rates will keep the currency trading higher against several of its main rivals until the end of the year.
According to Westpac, prices for New Zealand’s main exports are at ‘extremely high’ levels, and if trade continues at the current rate both economic growth and the local currency will be lifted.
The Bank’s chief economist, Dominick Stephens, stated; ‘We expect the Kiwi to average 94 cents against the Australian Dollar this year and to remain above 80 cents against the US all year.’
As the Bank of England has previously warned against the dangers of Sterling strengthening too much, the central bank may intervene if the Pound climbs much higher – meaning that the ‘Kiwi’ is also likely to remain stronger against the British currency this year.
Although the Pound was boosted against several of its most traded rivals early into European trading as a result of surprisingly strong UK retail sales data, Sterling failed to advance on the New Zealand Dollar.
Economists have forecast that today’s retail card spending data for New Zealand will show a 0.6 per cent month-on-month increase in January following a 0.6 per cent gain in December.
Considerable GBP/NZD movement can be expected to occur tomorrow when the Bank of England’s inflation report is published.
New Zealand Dollar (NZD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
New Zealand Dollar,
,US Dollar,0.8311,
New Zealand Dollar,,Euro,0.6078,
New Zealand Dollar,,Australian Dollar,0.9218 ,
New Zealand Dollar,,Pound Sterling,0.5069 ,
US Dollar,,New Zealand Dollar,1.2058 ,
Euro,,New Zealand Dollar,1.6459 ,
Australian Dollar,,New Zealand Dollar,1.0859 ,
Pound Sterling,,New Zealand Dollar, 1.9750 ,
[/table]
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