- Pound appreciates in spite of construction result – Falling output on month and year
- Profit-taking reduces Sterling’s value – UK currency remains high overall
- New Zealand Dollar steady on Chinese data – Asian superpower grows by more-than-expected
- NZ inflation rate data due over weekend – Next major UK announcements out on Wednesday
The Pound has been a steady option against the New Zealand Dollar today, on account of the continued positive influence of recent Bank of England (BoE) news.
The New Zealand Dollar has also made positive progress, which is a welcome change to a previous day of disaster for the antipodean currency.
UK Economic News: Investor Profit Taking Following BoE Decision Cuts Pound Gains
The Pound has remained a relatively safe option against its peers today, although most advances are shadows of those seen yesterday in the immediate aftermath of the Bank of England (BoE) interest rate decision.
The first since the voting outcome in June to leave the EU, the BoE had widely been expected to cut the rate from 0.50% to either 0.25% or 0%. As it stood, however, the central bank left rates unchanged, with only one Monetary Policy Committee (MPC) member voting for a cut.
The Pound shot up after the news, though as today’s depleted status has shown, profit-taking overnight has dampened overall enthusiasm in the UK currency.
Lately, the UK’s May construction output results have fallen on both the month and the year.
Notable GBP movements have included gains of 0.2% against the Euro (GBP EUR) and the New Zealand Dollar (GBP NZD), as well as a greater gain of 1.2% against the Japanese Yen (GBP JPY).
New Zealand Dollar Effects a Recovery after Chinese Data Prints Positively
The appeal of the ‘Kiwi’ was extremely low over the past 24 hours, but has recently began to make more positive upward movements on the whole.
This has been caused by Chinese domestic data, specifically focussing on the June industrial production results and Q2 GDP stats. In the former case, figures have risen on the year in June, while GDP has also increased in a better-than-expected manner.
Not all that glitters is gold, however, as St James’ Place Chief Investment Officer Chris Ralph has theorised, by saying:
‘People are…a bit concerned about the veracity of data coming out of the Chinese government, but what I think we saw was that industry and construction was actually slightly stronger than the first quarter, up 6.1%, there was some stimulus by state firms, but actually a lack of investment by private companies’.
New Zealand Dollar movements of note have been mainly positive, with advances being seen of 0.3% against the Canadian Dollar (NZD CAD), the Chinese Yuan (NZD CNY) and the US Dollar (NZD USD).
Future GBP, NZD Forecast: Coming Week to Bring UK Jobs Data and NZ Inflation Stats
The next pairing data to watch out for will actually come from New Zealand on Sunday, when the Q2 inflation rate stats are announced; at present, a decline on the year and rise on the quarter is expected to bring a 0.3% outcome in both cases.
For the UK, one of the most notable days of the week to come will be on Wednesday, when the UK’s claims, unemployment and earnings stats are announced.
Unfortunately for the future prospects of the Pound, claims are set to rise along with unemployment, while average earnings excluding bonuses have a minor decline expected.
Current GBP, NZD Exchange Rates
The Pound New Zealand Dollar (GBP NZD) exchange rate was trending in the region of 1.8691 and the New Zealand Dollar Pound (NZD GBP) exchange rate was trending in the region of 0.5353 today.
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