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Pound to New Zealand Dollar (GBP/NZD) Exchange Rate Forecast: Can Rising Services PMI Restore Sterling?

New Zealand Dollar Currency Forecast

Jump in UK Services Sector Activity could Spark GBP/NZD Exchange Rate Rally

The Pound (GBP) has struggled against the New Zealand Dollar (NZD) recently, falling by -0.4% in the pairing.

This deterioration has been caused by poor manufacturing PMI data, but later this week Sterling could recover when services sector stats are released.

The services sector is considered more important than its manufacturing counterpart, so rising services growth could improve GBP/NZD trading.

Current estimates are for the services PMI reading to have risen from 51.7 points in March to 53.5 points in April; this data will be released on 3rd May.

Growth in the services PMI may boost the Pound to New Zealand Dollar exchange rate (GBP/NZD), as the sector contributes the most to UK economic growth.

BoE Interest Rate Hike could Trigger Greater GBP/NZD Exchange Rate Gains

A more distant UK economic event that could also improve Pound exchange rates will be May’s Bank of England (BoE) interest rate decision, coming on the 10th.

Unlike countless previous sessions, there is a perception that BoE policymakers could raise interest rates despite the latest data.

The main knocks to expectations of higher interest rates have been poor GDP estimates from the ONS, as well as slowing inflation and the manufacturing sector upset.

If BoE policymakers decide to hike interest rates from 0.5% to 0.75% despite tough economic conditions, the Pound may rally against the New Zealand Dollar.

This isn’t guaranteed, however, as if a hike takes place but Pound traders think that now is too soon then the GBP/NZD exchange rate could conversely decline.

New Zealand Dollar to Pound (NZD/GBP) Exchange Rate Volatility Forecast on Dairy Price Data

The New Zealand Dollar’s (NZD) advance against the Pound (GBP) could extend this afternoon, when Global Dairy Trade (GDT) price index data comes out.

The measurement of changes to global dairy prices is a key influencer on the NZD, as the country exports a significant quantity of dairy products to overseas markets.

The GDT reading previously showed a 2.7% rise in dairy prices; if today’s reading shows a similar level of price growth then the NZD could rally.

It is worth noting that the GDT measurement has been volatile in the past, so an NZD-damaging price drop is not out of the question.

Can Rising Consumer Confidence Trigger Greater NZD/GBP Exchange Rate Gains?

Beyond the immediate effects of the GDT index data, the New Zealand Dollar to Pound (NZD/GBP) exchange rate could also be influenced by later consumer confidence stats.

The monthly ANZ confidence measure will come on 18th May and could push the New Zealand Dollar up against the Pound if it shows higher levels of optimism.

There will be another GDT announcement before the confidence reading; if both of May’s results show higher dairy prices then consumer confidence could grow.