The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate was able to post notable gains on Wednesday following the publication of slightly disappointing second quarter growth data for New Zealand.
While the nation’s headline unemployment rate declined, the participation rate also dropped and the nation was shown to have added fewer positions than forecast.
The New Zealand Dollar did soften following the report’s release, but some economists were optimistic about the unemployment rate easing to the lowest level in five years.
Statistics Manager Diane Ramsay noted; ‘We continue to see more people move into employment and although the participation rate has dropped from a peak last quarter, it is still at an historically high level.’
New Zealand Dollar declines were compounded as the price of dairy (New Zealand’s main export) plummeted. At the latest Global Trade Dairy Auction dairy prices slid by 8.4%. This followed a previous decline of 8.9% and meant that prices are now almost 50% lower than they were at the beginning of the year.
In the opinion of Markets and Banking reporter Christopher Adams; ‘Falling dairy prices could contribute to a pull-back in the Reserve Bank’s tightening cycle on interest rates, which would place further pressure on the New Zealand Dollar.’
However, while the ‘Kiwi’ was broadly softer, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate pared its advance on Wednesday in response to disappointing UK Manufacturing/Industrial Production and growth figures.
During the Australasian session the GBP/NZD pairing was trending in a narrow range as the situation in Ukraine sparked a risk-off environment and Australia published its own less-than-impressive employment figures.
Pound Sterling to New Zealand Dollar Weekly Forecast
Today some modest movement in the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate could be caused by the Bank of England’s (BoE’s) interest rate decision, although the central bank is unlikely to offer up any surprises.
The European Central Bank’s (ECB’s) interest rate decision is more likely to spark currency market movement.
Overnight China’s Trade Balance and Import/Export figures could trigger some final New Zealand Dollar fluctuations before the weekend, although investors with an interest in the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate will also be paying attention to the UK’s Construction Output and Trade Balance reports. Over the weekend China will publish its inflation figures for July.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trending in the region of 1.9891, unchanged from the day’s opening levels.
New Zealand Dollar (NZD) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
New Zealand Dollar,
,US Dollar,0.8461,
New Zealand Dollar,,Euro,0.6322,
New Zealand Dollar,,Australian Dollar,0.9124,
New Zealand Dollar,,Pound Sterling,0.5019,
US Dollar,,New Zealand Dollar,1.1808,
Euro,,New Zealand Dollar,1.5806,
Australian Dollar,,New Zealand Dollar,1.0948,
Pound Sterling,,New Zealand Dollar, 1.9894,
[/table]
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