A more optimistic economic outlook for the UK has been pushing the Pound higher ever since the Bank of England published its inflation report on Wednesday.
The British currency has rallied notably against peers like the US Dollar and Euro, hitting multi-week highs against both, but the New Zealand Dollar still ended the local session stronger against its rival.
Earlier this week the ‘Kiwi’ was supported by impressive Chinese trade data and the news that New Zealand’s performance of manufacturing index showed expansion for a sixteenth month.
Yesterday’s less-than-impressive Australian employment figures also helped the New Zealand Dollar climb as it increased the odds of the Reserve Bank of New Zealand raising interest rates before the Reserve Bank of Australia.
While the Pound was trading strongly prior to the release of UK construction output figures, the New Zealand Dollar eked out further gains following the publication of China’s consumer and producer price indexes.
As forecast by economists, China’s producer price index declined by 1.56 per cent in January, year-on-year.
However, the nation’s consumer price index advanced by 2.5 per cent in January rather than the year-on-year climb of 2.4 per cent expected.
Senior market strategist Imre Speizer said this of the New Zealand Dollar’s movement; ‘The Kiwi has got a modest upward bias.
It’s not a screaming buy but clearly there is a good, positive backdrop in New Zealand. [The Kiwi] could have a go at punching above 84 cents in the next week or so and if it does, the currency could reach 86 cents around the time of the monetary policy statement next month’.
Next week there are several economic reports for New Zealand to be aware of, including retail sales figures, the REINZ house price index and the nation’s consumer confidence index.
However, China’s data releases (which include January’s performance of services index and HSBC/Markit Flash PMI for February) are likely to have more of an impact on the New Zealand Dollar’s exchange rate.
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,0.8368,
New Zealand Dollar,,Euro,0.6097,
New Zealand Dollar,,Australian Dollar,0.9294 ,
New Zealand Dollar,,Pound Sterling,0.5014,
US Dollar,,New Zealand Dollar,1.1977 ,
Euro,,New Zealand Dollar,1.6356 ,
Australian Dollar,,New Zealand Dollar,1.0779 ,
Pound Sterling,,New Zealand Dollar, 1.9959 ,
[/table]
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