Hints for 2019 BoE Interest Rate Hike could Boost GBP/NZD Exchange Rate
The Pound (GBP) has slipped and made a minor loss against the New Zealand Dollar (NZD) today, but could recover on upcoming Bank of England (BoE) speeches.
For context, the recent GBP/NZD exchange rate dip has been a move away from the week’s best rate, but is still above Monday’s interbank rate of NZ$1.9573.
BoE Chief Economist Andy Haldane and Governor Mark Carney will both be giving remarks today and could contribute to a GBP/NZD exchange rate recovery.
GBP traders will be looking for any sign that there could be one or more BoE interest rate hikes next year, which Mr Haldane and Mr Carney may allude to.
Despite the continued uncertainty caused by the Brexit process, the assumption is that the UK central bank could commit to at least one rate hike next year.
Interest rates are still at a historically low 0.75%, so any indication of a future rate hike could be enough to boost GBP demand today.
Future GBP/NZD Forecast: Will UK GDP Growth Push Pound Sterling Higher?
Beyond any potential support from BoE officials today, the Pound to New Zealand Dollar exchange rate (GBP/NZD) could also be improved by Friday’s UK data.
Finalised UK GDP growth rate stats are out on Friday morning and might increase demand for Pound Sterling, as they are expected to confirm growth during Q2 2018.
A faster pace of growth on the quarter and the year in 2018 could be enough to raise demand for the Pound, given the positive economic implications.
New Zealand Dollar to Pound Forecast: Will NZD/GBP Exchange Rate Drop on Lower Consumer Confidence?
The last major economic data from New Zealand this week will be this evening’s Roy Morgan consumer confidence reading for September.
Provided by ANZ Bank, this measurement of consumer sentiment levels is tipped to decline from 118 points to 117.
While this may seem a minimal shift on paper, the New Zealand Dollar (NZD) could still fall against the Pound (GBP) on the news because of the negative implications.
Among other issues caused by lower consumer confidence, a prolonged decline might mean reduced spending and an eventual dip in national GDP growth.
Next Week’s NZD/GBP Outlook: Can Dairy Price Data Support the New Zealand Dollar?
Moving ahead to the coming week, the New Zealand Dollar to Pound exchange rate (NZD/GBP) may also be affected by Tuesday’s dairy price data.
The measurement of global dairy prices, compiled by Global Dairy Trade, previously showed a -1.3% drop.
This was bad news for New Zealand and the New Zealand Dollar, as the nation has a highly developed dairy farming industry.
Lower dairy prices mean tougher conditions for national dairy farmers, so another slowdown could cause additional NZD exchange rate losses.
On the other hand, however, if prices rise by a significant level next week then the New Zealand Dollar could rally against the Pound on the positive implications.