The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate began the week in a buoyed position as Reserve Bank of New Zealand Governor Graeme Wheeler’s commentary regarding the ‘Kiwi’s unjustified strength continued to take a toll.
Over the next five days the GBP/NZD pairing fluctuated as dismal dairy prices and a lacklustre building permits report reduced demand for the New Zealand Dollar while the Pound came under pressure from a cooling in the UK’s housing sector and an unforeseen tumble in domestic Consumer Confidence.
The New Zealand Dollar was also trending lower as a result of the RBNZ signalling that additional interest rate increases aren’t on the horizon in the months ahead.
The New Zealand Dollar was able to stage a modest rebound after Federal Reserve Chairwoman Janet Yellen asserted that US interest rates will be kept on hold until after the tapering of bond purchases has been concluded in October and the GBP/NZD exchange rate looked set to end the week in a slightly softer position.
Pound Sterling to New Zealand Dollar Weekly Forecast
This week particularly influential economic reports for New Zealand were a little lacking, but the same can’t be said for next week.
Volatility in the Pound Sterling to New Zealand Dollar may well be caused by New Zealand’s employment figures for the second quarter.
The unemployment rate came in at 6.0% in the first quarter of the year after a 3.7% year-on-year positive employment change.
While a positive result would be New Zealand Dollar supportive, a negative result could push the currency lower.
New Zealand’s ANZ Commodity Price and QV House Price reports will also be of interest.
As Australia and China are New Zealand’s two major trading partners, New Zealand Dollar volatility could be occasioned by the Reserve Bank of Australia’s interest rate decision, Australia’s employment data, China’s Services and Composite PMI and China’s trade data.
Of course, movement in the Pound Sterling to New Zealand Dollar exchange rate will also be triggered by the week’s UK news, which includes Construction and Services Purchasing Managers Indexes, Industrial and Manufacturing Output data and a growth estimate for July.
By far the week’s biggest UK news is the Bank of England’s interest rate decision. While the central bank is more than likely planning to leave interest rates on hold and the level of asset purchases unchanged, any surrounding commentary regarding the central bank’s future interest rate intentions would have a major impact on the Pound.
If the week’s UK reports follow the recent trend in domestic fundamentals by coming in slightly below forecast, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate could end the week lower than it began.
UPDATED 09:35 GMT 01 August, 2014
Pound to New Zealand Dollar Slides after PMI Flop
The Pound to New Zealand Dollar exchange rate closed out the local session little changed against its major currency counterparts.
The pairing was unaffected by China’s Manufacturing PMI, which showed another month of solid expansion in July.
During the European session Sterling declined against almost all of its most traded peers following the release of a less-than-impressive Manufacturing PMI print from the UK.
The gauge of manufacturing had been expected to soften slightly but the drop to 55.4 acts as yet another sign that the UK’s economy might be losing momentum.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trending in the region of 1.9840.