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Pound New Zealand Dollar (GBP/NZD) Steadies as New Zealand Business Expectations Slide

New Zealand Dollar Currency Forecast

GBP/NZD Exchange Rate Rangebound as Chinese Retail Sales Figures Disappoint

The Pound New Zealand Dollar (GBP/NZD) exchange rate is steady today and is currently trading around NZ$1.910 on the inter-bank market.

Sterling (GBP) failed to gain on the New Zealand Dollar (NZD) following the publication of the Reserve Bank of New Zealand’s (RBNZ) Q1 business inflation expectations figures, which slipped to 2.02%.

Continuing concerns over the Chinese economy – New Zealand’s biggest trading partner – are also causing many NZD traders to remain cautious, with reports that Chinese retail figures slowed to their slowest level since 2005.

Analysts at the financial services company, Nomura, commented:

‘[Chinese] [r]etail sales growth during the ‘golden week’ of the lunar new year (LNY) holidays declined further to 8.5% year-on-year this year from 10.2% in 2018, the first instance of single-digit growth since the data were released in 2005.’

Many ‘Kiwi traders, however, are remaining apprehensive over the stalemate between the US and China regarding trade – with the deadline for the ‘trade truce’ between the two nations due to end on 1 March.

Naguib Sawiris, an Egyptian telecom investor, has remained optimistic about US-China trade talks however, saying:

‘I think the [Chinese] leadership is smart, so they will change what they can change.’

There are no notable UK economic data releases today, with many Pound traders instead focusing on a speech to be delivered by the Governor of the Bank of England, Mark Carney – and with any dovish comments this could see the GBP/NZD exchange rate fall.

GBP/NZD Exchange Rate Steadies as Sterling Traders Brace for May’s Commons Speech

Today will also see Prime Minister Theresa May address the House of Commons, in which she is expected to say:

‘By getting the changes we need to the backstop; by protecting and enhancing workers’ rights and environmental protections; and by enhancing the role of Parliament in the next phase of negotiations I believe we can reach a deal that this House can support.’

GBP investors, however, have remained cautious after comments from the EU’s Brexit negotiator, Michel Barnier, last night, who said that discussions had been ‘constructive’, yet concluded:

‘[It is] clear from our side we’re not going to reopen the withdrawal agreement, but we will continue our discussions in the coming days.’

GBP/NZD Outlook: New Zealand Interest Rate Decision in Spotlight

NZD traders will be looking ahead to tomorrow when the RBNZ is set to release its interest rate decision, which is expected to remain unmoved at 1.75%.

However, any dovish comments about New Zealand’s economy made during the rate statement following the decision is likely to dampen confidence in the ‘Kiwi’, and could see the NZD/GBP exchange rate fall.

Tomorrow will also see the publication of the Chinese yearly foreign direct investment figures for January, and with any signs of an increase this could buoy confidence in NZD as New Zealand’s biggest trading partner show signs of recovery.

GBP traders, meanwhile, will be looking to tomorrow’s retail price index figures for January, which are, however, expected to decrease.

These will be followed by the printing of the UK PPI core output figures for January.

The GBP/NZD exchange rate, however, will most likely be dictated by Brexit developments again this week, with Theresa May rallying to secure parliamentary consensus on the newly amended deal ahead of the imminent 29 March leave date.