- UK currency dips against peers on continued polling upsets – ‘Leave’ campaign appears to take the lead
- UK inflation generates support for GBP – Lacklustre result causes relief as worst fears are avoided
- New Zealand Dollar low after warnings over farming impact on environment – Concerns over future clash between two areas
- UK earnings and employment stats incoming – NZ current account also due today
The Pound has, on the whole, been a mixed option for investors recently, having remained flat against the New Zealand Dollar like last week and made notable gains and losses elsewhere on the back of the EU Referendum debate.
The New Zealand Dollar has been more consistently unappealing, having dropped against most of its peers due to converse strength in the US and a concern that the nation’s economic priorities may be misplaced.
UK Economic News: ‘Brexit’ Continues to Destabilise the Pound as Vote Day Approaches
With just over a week to go until the EU Referendum on June 23rd, the Pound has been clearly suffering the negative effects of the instability generated by the vote.
At the start of the week, Sterling crashed against its peers on yet more polling data, which has increasingly pointed towards the ‘Remain’ camp as being the weaker of the two when it comes down to voter sentiment.
In a balanced response to the latest news, analyst Sir Lynton Crosby said:
‘These positive trends for ‘Leave’ among the entire electorate, as well as definite voters, indicate that both its messaging and campaign tactics may be beginning to pay off. But with just over one week left until Britain heads to the polls, the question is whether they will pay off in time?’
In other UK news, the inflation rate remained at 1.2% on the year in May. Although predictions had been for a rise to 1.3%, the simple fact that a drop was not recorded seems to have been enough to trigger a minor recovery among some of Sterling’s pairings.
The Pound has risen by 0.2% against the Euro (GBP/EUR) today but fallen by -0.2% against the New Zealand Dollar (GBP/NZD) and by -0.8% against the Japanese Yen (GBP/JPY).
New Zealand Dollar Dips as US Dollar’s Ascent Combines with Re-evaluation of NZ Economy
The ‘Kiwi’ has been an unsafe option recently, owing to the reduced appeal of the New Zealand Dollar stemming from relatively difficult-to-control circumstances.
In the first instance, the US Dollar has been on a bull-run of late due to global market instabilities pushing up the appeal of the US currency as a safe-haven option and conversely pushing the ‘Kiwi’ and other commodity currencies down as a result.
Additionally, a recent report from 2015 Nuffield Scholar Dan Steele has put across the case that the nation’s agriculture-intensive economy should perhaps be pared back, in order to improve the quality of the natural environment, which draws countless tourists to the country every year.
New Zealand Dollar movements of late have included gains of 0.3% against the Pound (NZD/GBP) and 0.4% against the Euro (NZD/EUR) but losses of -0.3% against the Chinese Yuan (NZD/CNY) and -0.4% against the US Dollar (NZD/USD).
Future GBP, NZD Forecast: NZ Account Stats due Tonight, Spread of UK Data due Tomorrow Morning
The next pairing data due will come from New Zealand, in the form of the Q1 current account stats. In a somewhat positive prediction, the deficit-GDP ratio is forecast to ‘improve’ from -3.1% to -3%.
UK contributions will next come tomorrow morning, in the form of the claims, unemployment and earnings stats for May and April.
Recent forecasts have been for rising claims, flat unemployment and a dip in earnings.
Current GBP, NZD Exchange Rates
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate was trending in the region of 2.0137 and the New Zealand Dollar to Pound Sterling (NZD/GBP) exchange rate was trending in the region of 0.4967 today.
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