- UK currency positive as trading session reopens – Profit-taking limits overall GBP gains
- Morning’s borrowing data shows reduction in May – Little overall impact had on GBP
- New Zealand Dollar stays strong despite data shortage – Recent report highlights value of tech contributions to economy
- Lack of UK data could see Pound trending sluggishly – NZ credit and migration figures due overnight
The Pound has posted positive movements for the second day in a row, although its overall performance is noticeably worse than Monday’s historic highs.
The New Zealand Dollar has managed a second day of strength, thanks in part to EU Referendum fears driving down the appeal of the indirectly-linked US Dollar.
UK Economic News: Sterling Remains Steady after Last Piece of Pre-Referendum Data is Released
The Pound has been a strong contender against most of its peers today, having made gains of 0.4% against the Euro (GBP/EUR), 0.6% against the US Dollar (GBP/USD) and 1.2% against the Russian Ruble (GBP/RUB). Notably, however, the Pound has trended in a tight range against the New Zealand Dollar (GBP/NZD) and fallen by -0.5% against the South African Rand (GBP/ZAR).
This depleted performance compared to yesterday is an indicator of profit taking on yesterday’s highly favourable rates, which themselves came from news that ‘Remain’ support was stronger than ‘Leave’ in polling data.
UK data today has been broadly positive, although while the amount borrowed by the government in May was -£0.4bn lower than in the previous year, the UK’s debt/GDP ratio has still risen to 83.7%.
New Zealand Dollar Maintains Positivity as US Dollar Stays Low on Brexit Fears
The ‘Kiwi’ has remained a fairly safe option for investment overnight, having started the day printing positively against all but the Australian Dollar (NZD/AUD), where a minor drop has been recorded. In other pairings, the New Zealand currency has risen by over 0.3% against the Chinese Yuan (NZD/CNY) and the US Dollar (NZD/USD), along with a slight advance against the Pound (NZD/GBP).
Domestic data has once again been lacking for the antipodean nation at the start of the week, with the only notable source of support being a report from Minister for Economic Development Steven Joyce and Minister for Communications Amy Adams.
The report has focused on the technology sector of New Zealand and optimistically predicts that for every 4% of improved productivity in the sector, around 2.7bn in GDP could be provided.
Commenting on the report, Adams said:
‘By better understanding the sector’s contribution, we are well positioned to seize new opportunities and drive forward the next phase of our digital economy’.
In addition to this news from home, the ‘Kiwi’ has also been supported against peers due to the fact that the US Dollar is still down on a second consecutive day of concerns about the impacts of ‘Brexit’.
Future GBP, NZD Forecast: New Zealand Migration and Card Stats Incoming, Pound May Level Out
With the penultimate day of the EU Referendum incoming, there are not expected to be any further UK economic announcements before and during the crucial vote day of Thursday.
With this in mind, it seems a distinct possibility that the Pound may trend statically against many of its peers tomorrow, as despite the ‘Remain’ campaign taking the lead earlier on in the week, it could transpire that investors nonetheless ‘hold fire’ on committing to Sterling so close to such a momentous decision.
From New Zealand, tonight will bring the May net migration result, while early tomorrow will see the announcement of credit card spending for the same month.
Current GBP, NZD Exchange Rates
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate was trending in the region of 2.0637 and the New Zealand Dollar to Pound Sterling (NZD/GBP) exchange rate was trending in the region of 0.4848 today.
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