The appeal of higher-risk currencies such as the New Zealand Dollar has moderately improved.
The New Zealand dollar exchange rates remained on stronger form into the weekend thanks to the RBNZ’s aggressive stance on reigning in the domestic housing market and the lowered odds of an imminent interest rate cut.
Although the Pound has been boosted by modestly encouraging UK trade figures the continued strength of the New Zealand Dollar has prevented it making any renewed gains.
Worries over the outlook of the UK economy were heightened this week when a succession of property funds were prompted to freeze withdrawals as well as cutting values.
This exacerbated market jitters and concerns that the vote for Brexit has prompted a sharp slowdown in economic activity, leaving investors little reason to buy into the Pound (GBP) as it plunged to fresh yearly lows against rivals.
Thus, in spite of a disappointing GlobalDairyTrade auction showing continued weakness in commodity prices, the Pound to New Zealand Dollar (GBP/NZD) exchange rate slumped.
Latest New Zealand Dollar Exchange Rates
On Saturday the Pound to British Pound exchange rate (GBP/GBP) converts at 1
The pound conversion rate (against pound) is quoted at 1 GBP/GBP.
The pound conversion rate (against us dollar) is quoted at 1.237 USD/GBP.
Today finds the pound to australian dollar spot exchange rate priced at 1.928.
NB: the forex rates mentioned above, revised as of 20th Apr 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.
The release of the June Federal Open Market Committee (FOMC) meeting minutes offered stronger support to the New Zealand Dollar (NZD), as the odds of the Fed opting to raise interest rates this year faded further.
Demand for the ‘Kiwi’ surged substantially on Thursday in the wake of comments from Reserve Bank of New Zealand (RBNZ) Deputy Governor Grant Spencer, who was speaking on the subject of the domestic housing market.
Investors were greatly encouraged by the implication that interest rates are unlikely to be cut in the near future, as Spencer noted that:
‘In current circumstances, the PTA rules out actively leaning against the housing cycle using monetary policy. Doing so would risk driving CPI inflation below the target range over the medium term. Conversely, further reductions in the OCR could pose a risk to financial stability through their effect on credit growth and house prices. While the outlook for CPI inflation will ultimately determine the future path of monetary policy, the trade-off against financial stability risk needs to be carefully considered.’
Positive UK Data Failed to Buoy GBP/NZD Exchange Rate
This NZD bullishness overshadowed a rather strong rally in the Pound, which followed some unexpectedly positive UK data.
Industrial and Manufacturing Production figures for May bettered forecast to demonstrate continued strength ahead of the EU referendum, although it seems unlikely that this recovery will be found to have sustained itself in the wake of the Brexit vote.
Nevertheless, markets were inclined to react optimistically to the results, pushing Sterling higher against the majority of its rivals on Thursday morning.
Strong US Payrolls Predicted to Weaken Bullish New Zealand Dollar
Friday could see the GBP/NZD exchange rate retake some ground, however, on the back of volatility surrounding the US Non-Farm Payrolls report.
If the US employment market is found to have rebounded significantly from May’s disappointing headline figure then the ‘Kiwi’ is expected to weaken in response to a bullish US Dollar (USD).
On the other hand, a disappointing result would encourage investors to favour higher-yielding assets such as the New Zealand Dollar, prompting the GBP/NZD currency pair to trend lower.