Disappointing UK data and a strog New Zealand dollar prompted the Pound to NZ dollar exchange rate to weaken as the fresh week got underway.
- The New Zealand Dollar to Australian Dollar exchange rate today: +0.35pct at 0.93936.
- The New Zealand Dollar to Euro exchange rate today: +0.9pct at 0.64247 EUR.
- The New Zealand Dollar to Pound Sterling exchange rate today: +0.93pct at 0.53886.
- The New Zealand Dollar to US Dollar rate: +1.06pct 0.70709.
In spite of the New Zealand trade surplus narrowing further than forecast in June the New Zealand Dollar went on a bullish run against rivals on Tuesday morning.
This seemed in part to do with a better-than-expected level of exports, although the GBP/NZD exchange rate was also weighed down by increasing bets on imminent BoE policy easing.
Latest Pound/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.
FX markets see the pound vs us dollar exchange rate converting at 1.237.
The live inter-bank GBP-AUD spot rate is quoted as 1.928 today.
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.
A lack of demand for the NZ Dollar helped to keep the GBP/NZD on a strong footing on Monday,, with expectations of an imminent RBNZ rate cut continuing to rise.
The Pound was somewhat dented by a particularly sharp weakening in the CBI Business Optimism Index, although the impact of the drop was ultimately limited.
Looking ahead, the value of the Pound seems set to be tested due to a number of negative forecasts for UK domestic data.
In particular, Wednesday’s GDP growth rate stats for the second quarter are expected to fall on the year. For Friday’s Gfk consumer confidence outcome, a decline from -1 to -5 has been predicted.
Ahead of the weekend the British pound to New Zealand dollar exchange rate pulled back in response to a raft of discouraging domestic data which eroded the fragile confidence of investors.
The GBP/NZD spot rate ended the week trending in the region of 1.8728.
The first post-Brexit ecostats, a raft of flash UK PMIs for July, did not offer much cause for confidence in the outlook of the economy.
Economic activity was shown to have contracted severely in the wake of the shock vote in favour of Brexit, with the PMIs plunging to their lowest levels since the aftermath of the financial crisis and helping to push the Pound to New Zealand Dollar (GBP/NZD) exchange rate lower.
British Pound (GBP) Set to Tumble Against the Major Currencies
This particularly poor UK data strongly encouraged the odds of the Bank of England (BoE) opting to cut interest rates in the near future, a prospect that is likely to weigh on the British pound for the foreseeable future.
Wednesday’s second quarter GDP report is unlikely to offer Sterling a rallying point, with forecasts pointing towards a weakening in growth due to the uncertainty leading up to the EU referendum.
Investors anticipate a dip from 2.0% to 1.8% on the year, a result which would not bode well for the economy’s robustness in the third quarter once the bulk of the post-Brexit impact begins to filter through.
However, if the measure surprises to the upside then the GBP/NZD exchange rate could regain some of its lost ground, even though the mood towards Sterling is expected to remain predominantly bearish for the near future.
New Zealand Dollar (NZD) Exchange Rates Biased to Downside as Goldman Sachs Forecast Three RNBZ Rate Cuts
Confidence in the New Zealand Dollar (NZD), on the other hand, is unlikely to turn particularly bullish thanks to increasing bets on the likelihood of imminent Reserve Bank of New Zealand (RBNZ) policy easing.
In response to Wednesday’s RBNZ Economic Assessment update analysts at Goldman Sachs noted:
‘We now expect the RBNZ will cut rates on three further occasions in August 2016 (-25bp), November 2016 (-25bp) and March 2017 (-25bp). This implies the OCR will finish this cycle at a low of 1.50% (-50bp lower than our previous forecast).’
As a result markets will be interested to hear from RBNZ policymakers in the coming days, with Governor Graeme Wheeler due to speak to a private audience on Monday.
NZ Trade Data Predicted to Weaken New Zealand Dollar Demand
The start of the week will also see the release of the latest New Zealand trade data, which could put additional downside pressure on the NZD.
Exports are predicted to have fallen in June, a sign that would not encourage particular confidence in the robustness of the domestic economy with the trade deficit expected to widen in response.
Nevertheless, if the domestic trade balance is found to have improved or wider market risk appetite improves then the New Zealand Dollar could trend higher against rivals.