The GBP to NZD exchange rate was trading below 1.93 cents as the European session began on Monday.
With UK inflation figures looming the Pound was feeling the pressure and was languishing close to a six-week low against the US Dollar.
Sterling was also struggling against several of its other main counterparts as investors bet that the UK consumer price index would show that national inflation slowed to the least in over four years in February.
The New Zealand Dollar, on the other hand, broadly advanced as tensions surrounding the Ukraine situation largely dictated market movement in an otherwise quiet Australasian session.
The ongoing G7 discussions in The Hague concerning potential Russian sanctions are of particular interest, and developments in that area are causing fluctuations in risk appetite.
In the view of Wellington-based industry expert Stuart Ive; ‘What would directly affect us would be an escalation in the situation in Russia and Ukraine, but at this moment in time it doesn’t appear to be happening and I would expect risk to come on. The Kiwi may creep a little higher this week, but that’s very subject to any further developments from Russia. […] The Kiwi economy continues to march on and many people point out it’s basically the sweet spot.’
Although economic data for New Zealand is fairly thin on the ground this week, Wednesday’s domestic trade balance figures may spark ‘Kiwi’ volatility.
Economists have forecast that the value of exports climbed from 4.08 billion New Zealand Dollars in January to 4.44 billion New Zealand Dollars in February while the value of imports declined from 3.77 billion to 3.75 billion.
As European trading progressed the New Zealand Dollar to Pound exchange rate fluctuated modestly in response to UK inflation data.
The report showed that UK consumer prices increased by 0.5 per cent on the month in February and 1.7 per cent on the year, as forecast.
USD to NZD Exchange Rate
The ‘Kiwi’ also continued trading higher against the US Dollar ahead of the publication of US consumer sentiment figures.
If the gauge improves, as economists expect it to, the NZD to USD exchange rate could trim gains before the end of the day.
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,0.8560,
New Zealand Dollar,,Euro,0.6186,
New Zealand Dollar,,Australian Dollar,0.9367,
New Zealand Dollar,,Pound Sterling,0.5190,
US Dollar,,New Zealand Dollar,1.1681,
Euro,,New Zealand Dollar,1.6169 ,
Australian Dollar,,New Zealand Dollar,1.0679,
Pound Sterling,,New Zealand Dollar, 1.9267,
[/table]
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