The Pound New Zealand Dollar exchange rate has risen significantly recently, though mainly due to short-term, high-impact news.
The New Zealand Dollar has weakened despite no negative domestic data releases and US Dollar weakness before the Presidential Election vote.
Major Uptrend seen for Pound New Zealand Dollar Exchange Rate after High Court Ruling
The latest Pound New Zealand Dollar movement has been extremely positive, with Sterling rallying to 1.70 in the exchange rate pairing.
GBP has been aided by a pair of positive announcements, covering PMIs recorded in October and a key Brexit-linked High Court decision.
In the former case, the PMI for the UK services sector – the nation’s most important – has risen from 52.6 to 54.5, defying forecasts of a decline. Additionally, the High Court has ruled that the Government may not automatically trigger Article 50 without Parliamentary approval first. When the latter news arrived, the Pound was sent soaring due to the implications of the UK leaving the EU being blocked or at least delayed.
The third big announcement on a busy day for the UK was that the Bank of England (BoE) left interest rates and quantitative easing unchanged, although its inflation forecasts caused some alarm with predictions of 2.7% consumer price growth in 2016.
The NZD has also seen bullish trading, with respectable gains coming against peers (excluding the bullish Pound) despite no major domestic data being released.
The only real news has actually been negative, with commodity price growth in October crashing from 5.1% to 0.7%.
Elsewhere, the New Zealand Institute of Economic Research has predicted national economic damage if Donald Trump becomes President, while the NZ city of Wellington has been named as a promising example of the nation’s burgeoning wave of startups.
Pound Sterling Expected to Rally Further if Government’s Article 50 Appeals Fail
The latest upwards spike in the Pound’s value has demonstrated just how closely linked investor optimism is to the triggering of Article 50.
With that in mind, it is likely that further GBP volatility is almost guaranteed after the appeals over the High Court’s decision have run their course.
Should the government win its appeal and regain the ability to trigger Article 50 automatically in Q1, Sterling could well dive against the NZD. If the Government loses in the Court of Appeal, however, the Pound may receive another boost against peers due to a potentially disruptive Parliamentary vote ensuring.
New Zealand Dollar Forecast: Continued Dairy Price Gains may Further Overvalue NZD
The value of the New Zealand Dollar has been a continuing issue faced by the Reserve Bank of New Zealand (RBNZ), which is expected to cut national interest rates from 2% to 1.75% on November 9th.
While this could devalue NZD, the central bank may be frustrated in the future if Global Dairy Trade auctions continue to show a rise in prices. This would increase the value of national dairy exports for New Zealand, which would likely lead the New Zealand Dollar to climb once again.
Recent Interbank Exchange Rates
At the time of writing, the Pound New Zealand Dollar (GBP NZD) exchange rate was trending in the region of 1.70 and the New Zealand Dollar Pound (NZD GBP) exchange rate was trending in the region of 0.58.
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