Foreign exchange markets saw the New Zealand Dollar exchange rate (NZD) soften vs the Pound (GBP) after Bank of England (BoE) official Martin Weale inspired confidence in the prospect of wage increases occurring in the near future.
Weale commented on the recent drop in UK inflationary levels which caused Pound Sterling (GBP) losses and suggested that the Bank of England should ‘look through’ the current low inflation.
He went on to state that he still believed that the central bank should increase borrowing costs immediately.
What do the latest forex markets show for the key global currencies today? (17/10/2014 21:00 GMT+1)
The Pound to New Zealand Dollar conversion rate is +0.15 pct higher at 2.02960 GBP/NZD.
The Euro to New Zealand Dollar conversion rate is -0.16 pct lower at 1.60950 EUR/NZD.
The US Dollar to New Zealand Dollar exchange rate converts +0.17 per cent higher at 1 USD is 1.26121 NZD.
The Canadian Dollar to New Zealand Dollar exchange rate today is converting +0.03 per cent higher at 1.11834 CAD/NZD.
The Aus Dollar to NZ Dollar exchange rate converts +0.07 per cent higher at 1 AUD is 1.10493 NZD.
Note: these are inter-bank forex rates to which margins are applied when transferring euros or pounds abroad - speak to a recommended FX provider to lock in the best foreign exchange rates.
Also get free email updates or rate alerts.
New Zealand Dollar to Pound Rate Today: NZD/GBP
The last two Monetary Policy Committee (MPC) meetings have seen a divergence in views from policymakers, with two of the nine voting for interest rate hikes.
BoE Governor Mark Carney has remained firm that increases in borrowing costs are not yet warranted.
Weale, an MPC member voting in favour of adjustments to the bank rate, argued: ‘My own sense is that the margin of spare capacity is now small and it is currently being used up rapidly.’
Weale believes that the UK economic recovery is in a strong state and warned that using up spare capacity could cause price pressures.
NZ Dollar vs Aus Dollar Rate Forecast: NZD/AUD
The New Zealand Dollar has made gains versus the Australian Dollar (NZD/AUD) after domestic data releases showed expansion in New Zealand.
The Business Performance of Manufacturing Index showed an increase in the manufacturing sector in September, rising from 57.0 to 58.1.
The data marks the fourth consecutive rise in recent months, and is now extending beyond levels that have only been broken into three times in the last ten years. The expansion is welcome news amid the current dairy price conundrum which has seen dairy commodity values almost slashed in half since February.
Economist Craig Ebert stated: ‘While dairy export prices and the outlook for dairy farmer income are becoming problematic, New Zealand’s construction industry is looking stronger by the day. The growth impulse from Canterbury’s reconstruction might be peaking soon, but only a fraction of the estimated $45 billion of work has been completed so far.’
New Zealand Dollar to Euro Exchange Rate Forecast
Meanwhile, NZD weakness was also seen against the Euro ahead of the final Eurozone Consumer Price Index figures.
The Core Consumer Price Index was adjusted to 0.8% from the 0.7% initial forecast. However, the non-core measure saw inflation remain at 0.3%.
The Eurozone appears to be approaching a period of quantitative easing as current European Central Bank (ECB) measures fall short of expectations.
Investors in the Euro are carefully watching ECB President Mario Draghi for any variation on his reiterations that he is prepared to use further measures to boost the Eurozone recovery.
New Zealand and Australia aren’t scheduled to release any more domestic data this week, leaving NZD and AUD exchange rate movement reliant on global developments.
However, the Eurozone will see the release of the First Eurostat GDP [Gross Domestic Product] Estimates after ESA 2010 Adoption, as well as Eurozone Construction Output figures and the ECB’s latest targeted long-term repayment operation progress.
The UK and Eurozone will both see central bankers making statements that could have an impact on the Pound and Euro exchange rates.