NZ Dollar Forecast: Pound vs New Zealand Dollar (GBP/NZD) Exchange Rate Softens before Trade Balance Figures

November 26, 2014 - Written by Toni Johnson

STORY LINK NZ Dollar Forecast: Pound vs New Zealand Dollar (GBP/NZD) Exchange Rate Softens before Trade Balance Figures

The British Pound softened against the New Zealand Dollar ahead of New Zealand’s Trade Balance figures despite recording gains against other currency majors.

The New Zealand Trade Balance is expected to contract again in October by -642 million, after September’s -1350 million.

However, Exports are predicted to reach 3.85 billion in October, slightly higher than September’s 3.61 billion.

Imports are forecast to lessen in October also at 4.60 billion from September’s 4.96 billion. However, dairy prices are an overarching problem for the New Zealand Dollar with the commodity falling by almost 50% since February.

Dairy giant Fronterra holds a fortnightly auction which has seen prices fall almost continually in the last few months. Industry expert Chris Galloway commented: ‘When Fronterra sneezes, New Zealand doesn’t just catch a cold, we get the flu.’

NZ Dollar Rates Today

The Pound to New Zealand Dollar exchange rate is -0.11 pct lower with a conversion rate of 1 GBP equals 2.00190 NZD.
The Euro to New Zealand Dollar exchange rate is -0.05 pct lower with a conversion rate of 1 EUR equals 1.58650 NZD.
The US Dollar to New Zealand Dollar exchange rate today is converting +0.29 per cent higher at 1.27316 USD/NZD.
The Swiss Franc to New Zealand Dollar exchange rate today is converting -0.05 per cent lower at 1.31978 CHF/NZD.
The Canadian Dollar to New Zealand Dollar exchange rate today is converting -0.47 per cent lower at 1.12262 CAD/NZD.

Pound to New Zealand Dollar Outlook

The Pound was continuously strong on Wednesday after UK Gross Domestic Product figures helped enforce the view that the UK is on target to outperform other Group of Seven (G7) developed nations in 2014. GDP growth was fuelled by the largest increase in consumer spending in over four years. Furthermore, Wednesday’s data marks the seventh consecutive quarter of UK expansion. Economist Ross Walker stated: ‘This remains a domestically centred recovery, though a relatively broad-based one across the private sector. The UK is likely to experience a significant slowdown in growth next year as the headwinds of fiscal and monetary policy tightening and weaker external demand return growth to a trend-like pace.’

On a less positive note, the UK CBI Reported Sales index fell from 31 to 27 in November, bypassing the forecast 28. However, retail sales are expected to pick up in the run-up to Christmas with many retailers offering discount deals to boost sales. Industry expert Barry Williams stated: ‘It’s no secret that it has been a demanding year for the retail industry but shopkeepers haven’t’ been pulling their punches when it comes to getting shoppers through their doors – borne out with the lowest essential item inflation in five years and growing online sales. We’re seeing encouraging signs that pressure on family budgets is letting up, and although there is some way to go with the broader economy, there can be some optimism for retailer and customers alike as we enter the crucial run up to Christmas.’

Thursday will see the release of the Lloyds Business Barometer as well as New Zealand Building Permits. New Zealand Business Confidence and UK Consumer Confidence are out for release on Friday which could catlayse GBP/NZD movement.

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