The GBP/NZD Exchange rate Weaker Following UK Employment Figures
The Pound New Zealand Dollar (GBP/NZD) exchange rate is trading lower today, following the release of a mixed UK labour report.
At the time of writing the GBP/NZD exchange rate is down nearly 0.4% today, leaving the pairing close to a one-week low.
Pound (GBP) Stumbles on Mixed UK Employment Figures
The Pound (GBP) was left on the defensive against the New Zealand Dollar (NZD) on Tuesday as markets digested the UK’s latest employment figures.
According to data published by the Office for National Statistics (ONS) the UK’s unemployment rate fell to 3.8% in March, surprising markets who had expected it to hold at 3.9% and falling to a new 44-year low.
However, this was undermined by the accompanying earnings figures, which revealed wage growth slowed from 3.5% to 3.2% over the same period and dented the appeal of Sterling.
The slowdown in wage growth coincided with heighted Brexit uncertainty in the UK, which may have prompted some belt tightening by employers at the end of the first quarter.
Mike Jakeman, an economist at accountancy firm PwC, said:
‘It is possible to see the shadow of Brexit in some of these figures. March was the month when Brexit anxiety was at its most acute and it might have been the case that firms were more reticent to offer higher wages and advertise new positions.’
GBP/NZD Exchange Rate Forecast: US-China Trade Progress to Offer Support to the New Zealand Dollar?
Looking ahead, the main catalyst of movement in the Pound New Zealand Dollar (GBP/NZD) exchange rate through the second half of the week looks set to be renewed trade tensions between the US and China.
Trade war fears have been reignited over the last week after the US hiked tariffs on Chinese goods to 25% on Friday, with China retaliating with their own tariffs on Monday.
This has unsurprisingly rocked FX markets this week, with risk-sensitive currencies such as the ‘Kiwi’ bearing the brunt of the volatility.
However, risk sentiment could begin recover in the coming days, following a series of tweets by Donald Trump, in which the US President hints that talks will continue and that a deal with China will be made ‘when the time is right’.
Meanwhile, the Pound could struggle through the remainder of this week as an absence of data leaves GBP investors to focus on Brexit, where a possible breakdown in cross-party talks could weaken Sterling sentiment.