Pound To New Zealand Dollar Rate Forecast: GBP Crashes Sharply To 2.087 NZD

Published: 20 Oct 2017 21:24 Commodity News Currency Markets Ecomomy News Fo

Pound to New Zealand Dollar exchange rate forecast

Damp market sentiment and falling milk powder prices caused the GBP to NZD exchange rate to climb today despite ongoing EU referendum uncertainty.

Unfortunately for Sterling, news from further afield has been of immense benefit to the New Zealand dollar exchange rates today.

This has been the US’s job growth in May, which has been far lower than expected.

NZD rates continued to outperform their rivals earlier today thanks to a couple of low-impact NZ data releases.

Overnight brought the Q1 value of all buildings percentage and the ANZ commodity price result for May, which previously printed at -0.8%.

Despite a bullish UK Services PMI the Pound has not been able to gain any particular traction against the New Zealand Dollar ahead of the weekend.

However, if the afternoon’s US payrolls data proves sufficient to encourage bets that the Federal Reserve will raise interest rates as soon as June a resurgence in safe-haven demand could prompt the GBP/NZD exchange rate to regain some ground.

The latest Organisation for Economic Co-operation and Development (OECD) forecast for the New Zealand economy added to the gloom surrounding the New Zealand dollar exchange rates on Thursday.

With the OECD predicting that weakness in the dairy sector will drag down growth in the coming year markets were not much inclined to favour the New Zealand Dollar.

Versus most of its major peers, the Pound Sterling advanced as traders take advantage of the comparatively low trade weighting.

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However, ‘Brexit’ jitters continue to hamper confidence with Sterling exchange rates forecast to decline in the longer term.

Meanwhile the New Zealand Dollar softened versus its major peers after comments from Bank of Japan (BOJ) officials weighed on market sentiment.

Pound to New Zealand Dollar exchange rate chart

For your reference, below are the latest FX rates:

On Thursday the Pound to British Pound exchange rate (GBP/GBP) converts at 1

The pound conversion rate (against pound) is quoted at 1 GBP/GBP.

FX markets see the pound vs euro exchange rate converting at 1.17.

At time of writing the pound to us dollar exchange rate is quoted at 1.262.

FX markets see the pound vs australian dollar exchange rate converting at 1.936.

NB: the forex rates mentioned above, revised as of 28th Mar 2024, are inter-bank prices that will require a margin from your bank. Foreign exchange brokers can save up to 5% on international payments in comparison to the banks.

UK Pound Sensitive to Political Developments, Further Volatility Forecast

As we draw ever closer to the UK’s June 23rd EU referendum, Sterling exchange rates have become increasingly sensitive to opinion polls.

Divergent results from said opinion polls have provoked significant GBP volatility, with further price swings expected.

Despite weaker-than-expected construction growth in May, the Pound rose versus most of its major peers (albeit fractionally) as traders take advantage of GBP’s comparatively low trade weighting.

new zealand dollar to pound sterling exchange rate chart

New Zealand Dollar (NZD) Exchange Rates Cool as Milk Powder Prices Fall

Although yesterday’s dairy auction results showed that overall prices had risen, the price of whole milk powder dropped. Milk powder is New Zealand’s largest export so the news weighed on NZD exchange rates.

Compounding NZD losses today, Bank of Japan (BOJ) official Takehiro Sato criticised the Bank’s adoption of negative rates, arguing that such a tool is counterproductive.

This led many to fear that the BOJ will avoid additional stimulus measures, weighing on market sentiment and ultimately demand for the high-yielding ‘Kiwi’ (NZD).

The Reserve Bank of New Zealand (RBNZ) interest rate decision is due next week, although markets have only priced in a 20% chance of a rate cut. Analysts at BNZ wrote:

'With a week to go until the RBNZ’s next meeting (which will be accompanied by a full Monetary Policy Statement), the market prices only slightly more than a 20% chance of a cut at the meeting. However, it still prices a full 25bps cut within the year ahead. Reflecting this, NZ 2-year swap

trades at 2.30%, down 1bps on the day.

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