Pound New Zealand Dollar Falls from Weekly Highs as UK Economy Less Resilient
The Pound New Zealand Dollar (GBP/NZD) exchange rate has fallen back from yesterday’s highs this morning. The Pound’s (GBP) recent rally has had its wing clipped by some shockingly poor UK retail sales results today.
Since opening this week at the level of 1.9165, GBP/NZD has been trending with an upside bias and spent the week climbing.
Yesterday, GBP/NZD touched on a high of 1.9404. This was the best level for GBP/NZD in a quarter, since November 2020.
However, the pair has since slipped again. This morning’s UK data dragged GBP/NZD lower still, but the pair still trends above the week’s opening levels in the region of 1.9285 at the time of writing.
New Zealand Dollar (NZD) investors are awaiting upcoming New Zealand retail sales results, but overall the Pound to New Zealand Dollar exchange rate outlook is still fairly strong on UK recovery hopes.
Pound (GBP) Exchange Rates Hit by Disappointing Retail Plummet
After days of strong performance, investors sold the Pound against some rivals this morning. The selloff came in reaction to today’s much weaker than expected UK retail sales results.
UK retail sales were expected to contract –1.3% year-on-year in January due to Britain’s third national lockdown. However, the figure printed at a dire –5.9%. The monthly figure saw a shocking contraction of –8.2%.
Analysts noted that the sales being much worse than expected indicated that the third national lockdown hit consumer activity worse than the second lockdown did in November. T
New Zealand Dollar (NZD) Exchange Rates Steady Ahead of RBNZ Outlook
The New Zealand Dollar is strengthening a little at the end of the week. Investors are finding the currency fairly appealing on the global market outlook, which continues to benefit from coronavirus recovery hopes.
Higher yields and commodity prices are also supporting the relatively risky and trade-correlated New Zealand Dollar.
Of course, anticipation for the Reserve Bank of New Zealand’s (RBNZ) policy decision next week is influencing NZD as well. According to Dominick Stephens, Chief Economist at Westpac:
‘Markets are flirting with the idea of the RBNZ lifting the OCR, but we expect no hike until early-2024,’
Pound New Zealand Dollar (GBP/NZD) Exchange Rates Await Key Week for ‘Kiwi’
The Pound has taken a slight hit, but expectations for the UK economy to recover from the coronavirus pandemic before some other major economies will likely keep the Pound outlook strong overall.
However, there is potential for the New Zealand Dollar outlook to improve next week with many key New Zealand datasets and news on the way.
Tuesday’s Asian session will see the publication of New Zealand’s Q4 2020 retail sales results. This will give NZD investors a better idea of how New Zealand’s own coronavirus pandemic recovery has been helping consumer activity.
Then on Wednesday, the Reserve Bank of New Zealand (RBNZ) will hold its February policy decision. If the bank shows signs of hawkishness, this is likely to have a lasting upside impact on the New Zealand Dollar’s strength.
UK job market data is due next week, but Pound investors will also remain focused on hopes for the UK’s recovery from the pandemic. Any signs that UK lockdown could last longer than hoped would dampen the Pound New Zealand Dollar (GBP/NZD) exchange rate.