The Pound to New Zealand Exchange Rate fell on Monday after the ‘Kiwi’ was boosted by the release of positive manufacturing data out of China.
The HSBC China flash manufacturing PMI for this month increased to 50.8 from last month’s figure of 49.4 and beat economist forecasts for a figure of 49.7. Any figure above 50 indicates expansion whereas one below indicates contraction.
The New Zealand Dollar surged as China is New Zealand’s largest trading partner, with ‘Kiwi’ businesses exporting $11.4 billion worth of goods to the Asian nation in the year up to April 30th.
Any positive news out of China often has an upward effect on the ‘Kiwi’ and its Australian relation.
“The manufacturing data out of China has really been given us another boost to the upside as world growth comes into focus at the beginning of this week. The Chinese data is the best in six months and it does play out that commodity currencies will get a boost from it,” said Stuart Ive, senior dealer at OMF.
The positive Chinese data also eased fears over a slowdown in the world’s second largest economy.
Against the US Dollar the ‘Kiwi’ climbed to its highest level in over a month as the data offered support and as the ‘Greenback’ remained under pressure from last week’s Federal Reserve policy meeting. The US Central Bank gave no clue as to when it could raise interest rates and lowered its growth forecast for the year.
The Pound meanwhile was remaining supported against the Euro and US Dollar on last week’s positive data releases and expectations that the Bank of England will raise interest rates before the end of the year.
‘Kiwi’ traders will now be watching today’s European and US manufacturing data for further signs that the global economy is growing.
Pound to New Zealand Dollar Update – 24/06/14
The Pound softened against the ‘Kiwi’ on Tuesday as investors embarked on a bout of profit taking ahead of Thursday’s UK GDP data release. The currency was also under pressure today as Bank of England Governor Mark Carney addresses the government’s Treasury Select Committee.
Investors will be looking for signs that the Central Bank is considering raising interest rates sooner than expected.
The ‘Kiwi’ meanwhile eased from yesterday’s two-month high against the New Zealand Dollar as speculation that the European Central Bank will keep interest rates low for an extended period weighed upon sentiment towards the riskier commodity based currencies.
The speculation sapped some of the optimism created by yesterday’s upbeat Chinese manufacturing data.
“Yesterday we had a China PMI report which was quite strong and that caused the ‘Aussie’ and the ‘Kiwi’ to rise against the US, and that rise for New Zealand then stopped as you had some negative news out of Europe,” said Imre Speizer, senior market strategist at Westpac Banking Corp.
As European trading continued on Tuesday the Pound to New Zealand Dollar exchange rate softened by 0.22%. With economic news for New Zealand lacking over the next couple of days the GBP/NZD pairing could trend in a narrow range.
Updated – 25/06/13
The Pound continued to trade weaker against the New Zealand Dollar on Wednesday as yesterdays comments by Bank of England Governor Mark Carney continued to weigh upon demand for the UK currency. Investors were disappointed by Carney’s comments that any rate rises will depend upon data releases. He focused on wage growth which continues to disappoint economists.
The ‘Kiwi’ was softer against the US Dollar and other peers as concerns over Iraq weighed upon demand for riskier assets. With US Special Forces entering the war torn Middle Eastern country and Syrian fighter jets bombing ISIS forces the conflict in the region looks set to deteriorate further.
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