The Pound New Zealand Dollar (GBP NZD) exchange rate tumbled from a three week high this morning following the final release of the UK’s first quarter GDP figures.
Pound (GBP) Tumbles as UK Growth Slows
The Pound slipped this morning as the Office for National Statistics (ONS) confirmed that the UK’s growth plummeted from 0.7% to 0.2% at the start of 2017.
As expected the slump in growth was driven by a fall in consumer spending, with rising prices as well as weak wage growth at the start of the year forcing families to adopt a more frugal approach to their finances.
Darren Morgan, head of GDP at the ONS said;
‘GDP growth for the first three months of 2017 remained unrevised at 0.2%. Growth was driven by business services and construction, partially offset by declines in some consumer-focused industries, such as retail sales and accommodation.’
However with UK economic data having strengthened over the last three months, analysts are optimistic that growth will have rebounded strongly in the second quarter.
New Zealand Dollar (NZD) Strengthened by Uptick in Commodity Markets
The New Zealand Dollar found its rally this morning aided by a jump in risk-appetite thanks to a resurgence in commodity prices.
Major commodity markets such as crude and iron ore have made gains over the last few trading sessions, helping to increase the appeal of high-yield currencies such as the ‘Kiwi’
Adding to this is the broad based weakness in the US Dollar (USD) which has seen investors flocking to riskier markets as they seek to make a quick profit.
GBP NZD Forecast: PMI to Cause Sterling to Tumble Next Week?
Looking ahead the GBP NZD exchange rate may stumble further at the start of next week with the release of the UK’s latest PMI data. The Manufacturing, Construction and Services sectors are all expected to report a slight dip in activity over the last month, likely prompting the Pound to cede some of its recent gains.
Meanwhile the New Zealand Dollar’s fortunes in the first half of the week are likely to be closely tied to the result of the latest Global Dairy Auction, with the Kiwi likely to slump if prices fall for the second consecutive time.
Current Interbank Exchange Rates
At the time of writing the GBP NZD exchange rate was trending around 1.7717 and the NZD GBP exchange rate was trending around 0.5643.
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