Pound Sterling FX Market Data Highlights for Week Commencing 18th April

April 18, 2016 - Written by Minesh Chaudhari

STORY LINK Pound Sterling FX Market Data Highlights for Week Commencing 18th April

WorldDairyTrade Auction to Provoke NZD Exchange Rate Volatility

This week’s session contains several key data sets which have the potential to shift the relative value of the world’s premier currencies. Our leading analyst takes a look at the tier one statistics of note and the effect they will have …

Not for the first time during recent weeks, the value of the New Zealand Dollar (currency : NZD) has the potential to be altered by risk events this week.

Tomorrow morning brings the release of the latest WorldDairyTrade auction results and investors holding the Kiwi Dollar will be looking for another improvement in the Average Winning Price to support the NZD.

The last set of auction results, published a fortnight ago, showed an uptick and another similar outcome this week would see the New Zealand unit improve against the other sixteen most actively traded global currencies.

An increase in the fetching price of Whole Milk Powder (WMP) – New Zealand’s number one export – would also help.

European Central Bank (ECB) Expected to Hold Rates

Elsewhere, the European Central Bank (ECB) is expected to sit on its hands and opt to maintain its current monetary policy stance when it reveals it latest policy decision on Thursday. ECB President Mario Draghi suggested in his post-decision press conference last month that there was no more scope to cut his region’s interest rates and the vast majority of analysts believe that the euroland central bank will be reluctant to increase its €80bn per month Quantitative Easing programme.

However, a ‘no change’ announcement from the ECB will not necessarily equate to no movement for the euro (currency : EUR).

Draghi’s suggestion after his Bank’s March announcement that this was it for loosening of policy saw the single currency strengthen in spite of the rate cuts and QE increase – a shift which hampers the region’s exporters and make foreign imports into the euroland relatively cheaper.

Draghi looked visibly annoyed with himself after his March press conference and it would seem unlikely that he will ‘mis-speak’ in such a fashion this month.

Draghi’s desire for a weaker local currency makes it likely that he will ‘talk down’ the euro on Thursday lunchtime – the near-term forecast for the single currency is therefore neutral to negative.

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TAGS: Euro Forecasts Pound New Zealand Dollar Forecasts Pound Sterling Forecasts