GBP/NZD Exchange Rate Falls as New Zealand’s Business Investment Continues to Improve
The Pound New Zealand Dollar (GBP/NZD) exchange rate plummeted by -0.9% today after hawkish comments from the Reserve Bank of New Zealand (RBNZ). The pairing is currently trading around NZ$1.94.
The New Zealand Dollar benefited from a more hawkish RBNZ monetary policy statement this week. The bank’s new projections indicate that the cash rate could rise in the second half of 2022.
The RBNZ also left its Official Cash Rate (OCR) at a record low of 0.25% this month, confirming expectations.
RBNZ Governor Adrian Orr commented sand that there are now ‘[t]entative signs of business investment [being] on the rise’ and that he was confident that ‘risk of generalized inflation remains low’.
As a result, the outlook for the New Zealand economy has improved, boosting the New Zealand to Pound exchange rate today to levels nearing 1%.
In other New Zealand economic news, today saw the release of the latest trade balance report, which dropped from $1.7 billion to $0.73 billion in April.
New Zealand’s imports data also fell, sparking concerns about the outlook for nation’s economy in the coming months.
However, a bullish RBNZ has continue do strengthen confidence in the New Zealand economy today, with the bank’s statement eclipsing the somewhat downbeat trade data.
Pound (GBP) Exchange Rate Falls Despite Growing Confidence in UK Economy
The Pound (GBP) fell today despite growing confidence in the UK economy as Covid-19 continue to remain relatively low, with hospitalisations showing a trend of decreasing over the past few weeks.
Today also saw the property website Zoopla predict that property prices could rise by 46% this year.
Grainne Gilmore, head of research at Zoopla, commented:
‘[S]upply constraints will continue to underpin pricing. The lack of supply is expected to hamper potential sales during this year, yet even so, we expect total transactions this year to rise to 1.5 million, marking one of the busiest years in the UK’s residential market in more than a decade.’
In an absence of any influential UK economic data today, however, the Pound has begun to shed some of its gains.
UK daily Coivd-19 infection rates continue to head moderately higher, sparking concerns that the Government’s roadmap for easing lockdowns next month could be delayed.
GBP/NZD Exchange Rate Forecast: Could a Dovish BoE Drag Down Sterling?
Pound (GBP) traders will be awaiting tomorrow’s speech from Dr Gertjan Vlieghe, a member of the Bank of England’s (BoE) Monetary Policy Committee.
Any downbeat comments about the UK economy, however, could further limit the Pound New Zealand Dollar exchange rate.
Australian Dollar (AUD) investors will monitor Friday’s release of New Zealand’s ANZ Roy Morgan Consumer Confidence gauge for May.
The Pound New Zealand Dollar exchange rate would suffer if the outlook for the New Zealand’s economy continues to improve.