Pound New Zealand Dollar (GBP/NZD) Exchange Rate Left Flat as NZ GDP Beats RBNZ Forecast
The Pound Sterling New Zealand Dollar (GBP/NZD) exchange rate remained muted and the pairing is currently trading at an inter-bank rate of NZ$1.9298.
On Thursday data revealed that New Zealand’s economy expanded at a steady pace during the first three months of 2019.
Quarter-on-quarter, GDP rose by 0.6%, beating the Reserve Bank of New Zealand’s (RBNZ) forecast of 0.4%.
Construction was the main driver of GDP, rising by 3.7%.
However, analysts believe that headline numbers masked an underlying weakness.
Private consumption rose by 0.4% compared to Q4 2018, and household expenditure on services only edged up by 0.3%.
This likely weighed on the ‘Kiwi’ leaving it muted against the Pound.
Sterling (GBP) Muted as Retail Sales Fall in May
Meanwhile, data revealed that UK retail sales fell by -0.5% between April and May, thanks to a strong decline of -4.5% in clothing sales.
Clothing sales suffered from its ninth consecutive monthly decline, and the Office for National Statistics (ONS) noted:
‘Evidence from retailers suggested that the poor weather may have delayed the sales for summer ranges.’
However, in the three months to May the amount bought rose by 1.6% compared to the previous three months.
Data revealed that growth was seen across all stored with the exception of department stores and household goods stores.
New Zealand Dollar (NZD) Flat Ahead of Trump-Xi Meeting
On Thursday, Chinese state media stated that the upcoming trade talks between the US and China are unlikely to immediately resolve major disagreements.
However, discussions between US President Donald Trump and Chinese leader Xi Jinping could start a new phase in trade talks.
In an editorial in the official China Daily, it said both sides are ‘in the mood for serious dialogue’ and added:
‘More likely than not, the one-on-one meeting will end up being the start of a new phase in the negotiations with the two leaders personally setting out their country’s respective bottom lines.’
This likely provided the risk-sensitive ‘Kiwi’ with an upswing of support as risk appetite rose as markets hoped this would ease the growing trade frictions.
Pound New Zealand Dollar Outlook: Will a Hawkish BoE Buoy Sterling?
Looking ahead to this afternoon, the Pound (GBP) could rise against the New Zealand Dollar (NZD) following the release of the Bank of England’s (BoE) interest rate decision and meeting minutes.
If the bank hints that it is prepared to raise interest rates this year, it could buoy Sterling.
Meanwhile, it is likely that the ‘Kiwi’ will remain under pressure ahead of next week’s meeting between US President Trump and Chinese President Xi Jinping.
If reports suggest that talks between the US and China are progressing successfully, the Pound New Zealand Dollar (GBP/NZD) exchange rate could fall.