Gains Forecast For Pound to New Zealand Dollar (GBP/NZD) Exchange Rate on UK House Price Data

November 20, 2014 - Written by John Cameron

STORY LINK Gains Forecast For Pound to New Zealand Dollar (GBP/NZD) Exchange Rate on UK House Price Data

The results of the latest global GlobalDairyTrade auction, releasedthis week, ensured that support for the New Zealand Dollar (currency:NZD) slumped during yesterday’s session.

A quick look at today's forex rates:

The NZ Dollar to Aus Dollar exchange rate converts +0.54 per cent higher at 1 NZD is 0.91259 AUD.
The New Zealand Dollar to Euro conversion rate is -0.63 pct lower at 0.62679 NZD/EUR.
The NZ Dollar to Pound Sterling exchange rate today is converting -0.86 per cent lower at 0.50152 NZD/GBP.
The NZ to US Dollar conversion rate is -0.55 pct lower at 0.78617 NZD/USD.
The Pound to New Zealand Dollar exchange rate converts +0.87 per cent higher at 1 GBP is 1.99396 NZD.
The Australian Dollar to New Zealand Dollar exchange rate today is converting -0.54 per cent lower at 1.09578 AUD/NZD.

Pound to NZ Dollar Exchange Rate Jumps on Dairy Auction Results

The Pound Sterling New Zealand Dollar exchange rate had plunged to as low as 1.9619 GBP NZD during early trading this week.

This represented the pair’s lowest level since 10th September, but the downward pressure was rapidly reversed when the results of the latest wholesale auction of farm produce were published.

They revealed that the overall index of dairy prices had slumped by some 3.1% since the last open sale, leading to speculation that the New Zealand-based dairy co-operative Fonterra would be trimming its farmgate milk price from NZD4.85 down to NZD4.55.

These market whispers sent the Pound Kiwi Dollar exchange rate GBP NZD back up to close to the two to one threshold during yesterday’s European session.

Climb to 2.1000 Forecast For GBP NZD

Federated Farmer's dairy chairman Andrew Hoggard explained the levels of disappointment amongst New Zealand’s producers, observing shortly after the release that, ‘it goes without saying that the lowest auction price in five years is going to be a blow to the industry.

Dairy farmers were hoping to see a lift or at least a plateau to realise Fonterra's $5.30 forecast in December. So this further drop increases the uncertainty of how realistic that goal is.’

Analysts now forecast that the Sterling New Zealand Dollar exchange rate could track back upwards towards the range-topping rates of above the 2.1000 GBP NZD threshold which the pair briefly breached in early Autumn.

UK House Prices Support GBP

Elsewhere, official figures published yesterday by the Office of National Statistics provided good news for the Pound Sterling and for UK homeowners alike.

The September numbers revealed that British property prices increased at an annualised pace of 12.1% last month – significantly up from August’s counterpart showing of 11.7%.

The development suggests that the Bank of England’s policy of restricting the amount of riskier lending secured on homes is not having its desired effect of cooling down the pace of domestic property price rises.

Analysts predict that this may force the BoE’s hand with regard an interest rate hike for the early part of next year.

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TAGS: Daily Currency Updates New Zealand Dollar Forecasts Pound Forecasts