Although a report showed that New Zealand’s current account deficit was narrower than forecast in the second quarter, the ‘Kiwi’ declined against the Pound during Australasian trading as a result of comments issued by New Zealand’s Finance Minister Bill English.
The New Zealand Dollar to Pound Sterling exchange rate was trading in the region of 0.5177 as of 09:55 am GMT
During an interview for Bloomberg Television English stated that if the New Zealand Dollar dipped to the ‘high 70s’ against its US counterpart it would be beneficial for the nation’s economy.
As English asserts; ‘Our exporters have dealt with the headwind of a pretty high cross rate over the last four or five years, in the mid 80s. They have shown themselves to be resilient. What we need to see now though is profitability in our export sector.’
Overnight the New Zealand Dollar also declined against the ‘Greenback’ as the Federal Open Market Committee’s policy meeting nears its conclusion.
In response to the ‘Kiwi’s movement currency strategist Mike Jones was quoted as saying; ‘We are broadly constructive on the New Zealand Dollar […] the economy is still outperforming, commodity prices are very high.’
In reference to the Federal Reserve’s tapering of stimulus, English remarked that if the Fed begins a gradual reduction in easing and starts to increase US interest rates it will help the ‘Kiwi’ to soften and make it easier for the Reserve Bank of New Zealand to start raising borrowing costs next year as planned.
The NZD/GBP exchange rate hit a low of 0.5154 pence per Dollar
English noted; ‘we look forward to further positive developments as the Federal Reserve continues to unwind. We’re in a pretty good position to benefit from any relaxation of pressure on the Kiwi exchange rate.’
The New Zealand Dollar’s decline against the Pound was exacerbated by the publication of minutes from the Bank of England’s policy meeting. The minutes showed that the nine-member Monetary Policy Committee was united in its belief that there is no need for increased stimulus in light of the positive UK economic data seen in recent weeks.
While the US Fed announcement will be a major catalyst of market movement during the North American session, additional ‘Kiwi’ fluctuations are likely to be triggered by New Zealand’s GDP data, due out at 23:45 GMT.
Economists have forecast that the nation’s economy expanded by 0.2 per cent in the second quarter (quarter-on-quarter) and was up 2.3 per cent on the year.
Current New Zealand Dollar (NZD) Exchange Rates:
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The New Zealand Dollar/US Dollar Exchange Rate is currently in the region of: 0.8236 >
The New Zealand Dollar /Euro Exchange Rate is currently in the region of: 0.6164 <
The New Zealand Dollar/Pound Sterling Exchange Rate is currently in the region of: 0.5172 <
The New Zealand Dollar /Australian Dollar Exchange Rate is currently in the region of: 0.8790 <
The US Dollar/ New Zealand Dollar Exchange Rate is currently in the region of: 1.2160 >
The Pound Sterling/New Zealand Dollar Exchange Rate is currently in the region of: 1.9358 >
The Euro/ New Zealand Dollar Exchange Rate is currently in the region of: 1.6229 >
The Australian Dollar/New Zealand Dollar Exchange Rate is currently in the region of: 1.1378 >
The Canadian Dollar/New Zealand Dollar Exchange Rate is currently in the region of: 1.1812 >
(Correct as of 09:55 GMT)
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