Higher UK PMI Readings could Cause GBP/NZD Exchange Rate Rise
The Pound (GBP) has held close to opening levels against the New Zealand Dollar (NZD) today, trading in the region of NZ$1.9562.
This limited movement still leaves Pound Sterling near a weekly exchange rate high of NZ$1.9598; the pairing was pushed up to this level by Brexit-related optimism.
Looking ahead to the coming week, the Pound could rise above this week’s best exchange rates if UK PMI data prints above forecasts.
UK manufacturing, construction and services sector activity data for August is out next week, over Monday to Wednesday respectively.
Current expectations are for the manufacturing sector to grow, but a converse construction sector slowdown is also anticipated.
The most important PMI reading to watch out for will be Wednesday’s services sector figure; this is predicted to rise from 53.5 points to 54.7.
Services sector activity is the single largest contributor to UK economic growth, so a higher reading could push the Pound to New Zealand Dollar exchange rate up.
If all three PMI readings miss forecasts and show a slowdown in sector activity during August, however, then the GBP/NZD exchange rate could drop.
Will UK GDP Reading Boost Pound to New Zealand Dollar (GBP/NZD) Exchange Rate Demand?
Beyond next week’s UK economic data, the GBP/NZD exchange rate could also be affected by UK GDP stats out on 10th September.
Covering July, these readings could show an acceleration in the pace of economic growth on the month, which would open the door to a Pound Sterling rise.
That said, UK GDP growth in June was reported at a minimal 0.1%, so unless there is a significant improvement then GBP/NZD exchange rate gains could be limited.
New Zealand Dollar to Pound Forecast: Will Dairy Price Data Bring NZD/GBP Exchange Rate Losses?
The next economic data concerning New Zealand will come out on Tuesday next week, consisting of the latest Global Dairy Trade price index.
This measures changes to global dairy prices and previously dropped by -3.6%. Unfortunately for NZD traders, the next reading is expected to show a -2% drop.
Lower dairy prices can lead to New Zealand Dollar losses, as they mean worse conditions for NZ dairy exporters.
New Zealand has a well-established dairy farming industry, so supportive dairy prices are essential for continued profits across the sector.
Are NZD/GBP Exchange Rate Gains ahead on NZ Manufacturing Sales Growth?
The New Zealand Dollar to Pound (NZD/GBP) exchange rate could firm in the future, when NZ manufacturing sales data comes out on 9th September.
The year-on-year sales reading for Q2 2018 is predicted to show growth, with a rise from 3.1% to 4.5%.
A faster pace of sales activity could raise NZD trader confidence and boost New Zealand Dollar demand, potentially leading to NZD/GBP exchange rate gains.
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