Slowing Pace of UK Wage Growth could Drag GBP/NZD Exchange Rate Lower
Pound Sterling has declined during trading, falling sharply because a UK inflation rate slowdown risks a Bank of England (BoE) interest rate hike freeze in August.
Unfortunately for GBP traders, the Pound’s present losses could continue on Thursday when UK retail sales data for June is released.
Last month’s readings are predicted to show a slowing pace of sales growth across the board, whether it’s monthly or annual sales, with or without fuel sales included.
None of the measurements are predicted to show contracting levels of growth, but a slowdown in the first month of summer may still lower Pound Sterling demand.
Can GBP/NZD Exchange Rate Recover on UK Business Activity Data?
The rest of this week may not bring much support for the Pound, but the GBP/NZD exchange rate could recover on Confederation of British Industry (CBI) stats next week.
The body representing UK businesses will be releasing an industrial activity reading on Tuesday, followed by business optimism and sales data on Wednesday.
The only forecast at present is for a higher level of business optimism in the third quarter; such a result could restore confidence among Pound Sterling traders.
More broadly, if the CBI reports rising industrial orders and higher sales activity then the Pound could also appreciate against the New Zealand Dollar next week.
New Zealand Dollar to Pound (NZD/GBP) Exchange Rate could Decline on Trade Surplus Reduction
On the other side of the currency pairing, the New Zealand Dollar (NZD) is at risk of declining against the Pound (GBP) when NZ trade balance data comes out on Tuesday.
June’s reading is tipped to show a reduction of the current trade surplus, with a shift from NZ$294m to NZ$200m.
This outcome would leave New Zealand with a healthy trade surplus, but as the balance has fallen into the deficit range twice in 2018, NZD traders may still be unsettled.
Could NZ Consumer Confidence Dip Push New Zealand Dollar to Pound (NZD/GBP) Exchange Rate Down?
Beyond next week’s NZ trade balance reading, the New Zealand Dollar to Pound (NZD/GBP) exchange rate could also be affected by later consumer confidence data.
This will be the ANZ Roy Morgan consumer confidence measure for July, which is expected to show a minor reduction in optimism levels during the month.
A forecast-matching decline from 120 points to 119 might not send the New Zealand Dollar into a nosedive against the Pound, but could still bring an NZD/GBP dip.
Business confidence in New Zealand has been extremely low ever since the change of government in 2017 and signs of lower consumer confidence could panic NZD traders.