- Pound Sterling slides after BoE announcement – Former hawk Weale turns dovish
- Opinion shift brought about by last week’s data – Worse-than-expected results seen after ‘Brexit’
- New Zealand Dollar rallies across the board – Trade surplus persists for sixth month in a row
- UK GDP stats due tomorrow morning – New Zealand to bring building permits data on Thursday
The Pound has been laid low recently, on account of limited domestic data being eclipsed by a change of opinion for a formerly optimistic Bank of England (BoE) policymaker.
The New Zealand Dollar has been on a roll, having advanced across the board on the deterioration of the US Dollar’s appeal.
UK Economic News: Pound Sterling Rates Collapse on New Dovishness from BoE’s Weale
The most significant event for the UK’s economic prospects recently has come from BoE official Martin Weale, who was speaking before next week’s interest rate decision.
Although Weale gave the Pound a significant amount of support last week by stating that an August interest rate cut could be a premature decision, he has since altered his outlook, indicating that more stimulus measures could be imminent. For context, earlier on in the month the BoE elected to leave the UK’s interest rate untouched.
The trigger for this change in outlook came from last week’s UK retail sales and PMI flashes, both of which fell heavily in the period leading up to and after the EU Referendum, respectively.
Exchange rate movements for the Pound today have consisted of a loss of -0.9% against the New Zealand Dollar (GBP NZD), a gain of 1.2% against the Russian Ruble (GBP RUB) and tight movement against most other peers.
New Zealand Dollar Rides Waves of Optimism after Six Months of Trade Surplus
The ‘Kiwi’ has been strong across the board recently, having made gains of 0.8% against the Pound (NZD GBP), 0.9% against the Chinese Yuan (NZD CNY) and 1% against the Canadian Dollar (NZD CAD).
This bull-run has partly been brought about by the major drop off in US economic confidence, which has been brought about by a shaky start to the Democratic Convention to formally nominate Hillary Clinton as the party’s presidential candidate.
Recent domestic data out of New Zealand has also been somewhat positive, as while the June balance of trade showed a reduction on previous figures, it nonetheless showed the sixth month in a row of a surplus existing for the national economy.
Responding to the news, ANZ Bank Senior Economist Phil Borkin said;
‘We’ve seen strong growth in fruit. Considering the challenges that the dairy sector has faced, it is actually still a pretty decent story’.
Future GBP, NZD Forecast: Pessimistically Predicted UK GDP Stats due Tomorrow
The next notable pairing data due will come from the UK, in the form of the nation’s preliminary GDP growth rate results for the second quarter, which are expected tomorrow morning.
A reprint at 0.4% is expected on the quarter, while a dip from 2% to 1.9% has been forecast on the year.
The next expected piece of New Zealand data will come on Thursday night, when the June building permits result is due.
Current GBP, NZD Exchange Rates
The Pound New Zealand Dollar (GBP NZD) exchange rate was trending in the region of 1.8567 and the New Zealand Dollar Pound (NZD/GBP) exchange rate was trending in the region of 0.5388 today.
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