The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate advanced by around 0.87% on Thursday morning.
Having risen to fresh highs against the Euro and US Dollar on Wednesday, the ‘Kiwi’ (NZD) softened on Thursday thanks to trader profit-taking. A larger declination was initiated by the Reserve Bank of New Zealand (RBNZ), however, after they tightened rules on investor lending in an attempt to cool Auckland house prices without raising interest rates.
The Pound, meanwhile, fluctuated versus its major peers ahead of the Bank of England (BoE) interest rate decision. A slight leaning towards declination can be attributed to cooling Halifax house prices.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trending in the region of 2.0262.
Pound Sterling (GBP) Exchange Rate Fluctuates ahead of BoE Rate Decision
Although most analysts don’t expect the BoE to alter the benchmark interest rate, there is a fractional possibility that the recent run of positive data results may see the current Asset Purchase Target reduced. However, with the general election just around the corner, political uncertainty is likely to weigh on monetary policy.
‘An uncertain outlook for policy could weigh on sentiment and activity,’ said James Knightley, an economist at ING Bank NV in London. ‘If the election passes without too much disruption we suspect that the UK economy will be in very good shape. We still think the BOE could raise rates in November.’
British data printed disappointingly on Thursday morning, which added downward pressure on the Pound. Year-on-year Halifax House Prices rose by 8.3% in February; down from the previous increase of 8.5%. House prices declined by -0.3% on the month, despite predictions of a drop of -0.2%.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate dropped to a low today of 2.0083.
New Zealand Dollar (NZD) Exchange Rate Dives on RBNZ Intervention
New Zealand’s central bank signalled that it may tighten property investor lending rules in the hope of cooling the Auckland housing market. ‘It looks to me like this is the first and necessary step to implementing some macro-prudential tools for investors,’ said Shamubeel Eaqub, New Zealand based economist. ‘The key constraint is how do you define an investor?’
‘It’s trying to say these investors are likely to face more stringent conditions when it comes to borrowing in terms of how much gearing they can have,’ said Eaqub. ‘It’s heading in the right direction, but the underlying issue hasn’t changed. It’s still very much about supply and until we resolve that, these things are essentially just buying time.’
Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate Forecast to Hold Gains
Although the Pound is likely to experience volatility as we draw nearer to the BoE rate decision, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is likely to hold gains for the remainder of Thursday’s trade, especially considering the current extent of the appreciation.
Friday may see GBP/NZD volatility with the BoE Inflation Target for the next 12 months. An absence of data pertaining to New Zealand will see the ‘Kiwi’ subject to changes in the commodities market.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate climbed to a high today of 2.0287.
