As foreign exchange markets continue to assess the chances of an imminent interest rate cut from the RBNZ and ‘Brexit’ fears decrease the Pound has made further gains against the New Zealand Dollar.
Friday morning saw the Pound (GBP) gain a modest boost from the GfK Consumer Confidence Survey, which unexpectedly improved from -3 to -1.
As markets braced for the latest US data the appeal of the ‘Kiwi’ was a little more muted, allowing the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate to trend narrowly higher.
This week is essentially over for pound sterling (GBP) and NZ dollar (NZD) exchange rate related data, therefore the next major movement isn’t likely until the coming week.
For the UK, next week’s data is set to include the construction and services PMIs for May, out on Thursday and Friday respectively.
New Zealand’s ecostats will be made up of building permits stats on Monday and terms of trade data on Tuesday.
Risk appetite continued to shore up the New Zealand Dollar exchange rates (NZD) in the wake of weaker-than-expected US PMIs, which seemed to lower the chances of the Fed opting to hike rates in June.
Combined with the bearish response to the latest UK GDP figures the Pound began to cede its recent gains back to the strengthening ‘Kiwi’.
A general lack of enthusiasm towards the US Dollar (USD) and improved risk appetite offered some additional support to the New Zealand Dollar exchange rates (NZD) on Wednesday.
However, the bullish run of the Pound (GBP) showed no signs of slowing as markets increasingly lowered their odds on the likelihood of a ‘Brexit’.
In spite of the UK overshooting its borrowing target for the 2015-2016 financial year by 4 billion Pounds, this failed to particularly weigh on the pound sterling to New Zealand dollar exchange rate.
The GBP/NZD spot rate entered a bullish run in response to the latest referendum poll as it suggested that support for the ‘Remain’ campaign had continued to increase, particularly among older voters and Conservatives.
With risk appetite weakened by increasing bets of a June interest rate hike from the Fed the sterling-kiwi exchange rate trended sharply higher.
Latest New Zealand/Australian Dollar Exchange Rates
On Saturday the Pound to British Pound exchange rate (GBP/GBP) converts at 1
The live inter-bank GBP-GBP spot rate is quoted as 1 today.
The live inter-bank GBP-USD spot rate is quoted as 1.249 today.
The pound conversion rate (against australian dollar) is quoted at 1.911 AUD/GBP.
Please note: the FX rates above, updated 27th Apr 2024, will have a commission applied by your typical high street bank. Currency brokers specialise in these type of foreign currency transactions and can save you up to 5% on international payments compared to the banks.
Other Currency Exchange News
NZ Dollar Offered Support, but Not Enough to Stop Bullish Pound
Some support was offered to the softened New Zealand Dollar (NZD) exchange rates overnight thanks to the latest raft of domestic trade data, as the country’s trade surplus was found to have unexpectedly widened.
While this indicated greater strength within the domestic economy, seeming to bode well for New Zealand’s growth outlook, this was not enough to permit the NZD to make gains against the rampant GBP.
Given the persistent hawkishness of Fed policymakers in recent days there are still concerns that the Reserve Bank of New Zealand (RBNZ) will cut rates again sooner rather than later, as Imre Speizer, Senior Market Strategist at Westpac, noted that:
‘The one big surprise to the RBNZ since the March MPS has been the strength of the NZD TWI which is 3% higher than its forecast. That argues for an even lower OCR than 2.0%, and we wouldn’t be surprised to see both a reduction in the OCR and a further lowering of its interest rate projection.’
Pound Sterling (GBP) Exchange Rates Extend Bullish Run Following IFS Report
Sentiment towards the Pound, meanwhile, remained generally bullish on Wednesday in spite of a lack of fresh UK data to prompt movement.
Rather than engaging in substantial profit taking investors were inclined to continue buying into Sterling in the wake of a report by the Institute of Fiscal Studies (IFS), which suggested that the UK could face two extra years of austerity measures in the event of a ‘Brexit’.
As markets increasingly favour the odds of a vote to remain within the EU over a vote to leave this latest ‘Remain’-supportive report encouraged further confidence, to the benefit of the GBP/NZD exchange rate.
Market Risk Aversion Forecast to Weigh on New Zealand Dollar (NZD) Exchange Rates
Signs of greater strength in the US economy are likely to weigh heavily on the appeal of the New Zealand Dollar throughout the remainder of the week, as further domestic data is decidedly lacking.
Should the odds of a June rate hike from the Fed be diminished, however, the ‘Kiwi’ could rally strongly, as a slower pace of US monetary tightening would in turn put less pressure on the RBNZ to cut rates.
Demand for the Pound could also decline over the coming days, with Friday’s GfK Consumer Confidence Survey forecast to show a continued weakening in domestic sentiment ahead of the June referendum.