GBP NZD Exchange Rate Eases Following RBNZ Comments, GBP AUD Rate Down On Jobs Data

Modified: Thursday, 6 December 2012 12:08 BST - Written by Frank Davies

STORY LINK GBP NZD Exchange Rate Eases Following RBNZ Comments, GBP AUD Rate Down On Jobs Data

Last night’s Asian session brought the release of two significant pieces of data from the Antipodes. Perhaps the weightiest development came in New Zealand with the latest Reserve Bank of New Zealand policy announcement which saw the Bank’s policy committee opt to maintain its key lending rate at 2.5%, as per analysts’ expectations.

The new RBNZ’s Governor Graeme Wheeler observed in his accompanying statement that, “the overall outlook is for stronger domestic demand and the elimination of current excess capacity by the end of next year,” and went on to suggest that domestic inflation would edge higher in the short-to-medium term, precluding the potential for any further trimming of rates. The unexpectedly hawkish nature of the RBNZ’s commentary triggered some limited support for the Kiwi, sending the GBP NZD exchange rate down to 1.9376 in early trading today. Further upside appears possible for the NZD as today’s session progresses.


Meanwhile, on the other side of the Tasman Sea, there was positive news for investors holding Australian Dollar-denominated assets overnight with the release of an encouraging set of Australian employment data. The figures surprised analysts by showing that the overall level of joblessness had tumbled to 5.2% last month, down from October’s showing of 5.5%. Although the news caused the Aussie to firm against Sterling, sending the GBP AUD exchange rate down as low as 1.5363 overnight, support for the Australian tender would surely have been more pronounced were it not for the effect which the domestic labour market data had on investors’ expectations regarding the potential future direction of the nation’s monetary policy. The Reserve Bank of Australia has trimmed its key lending rate throughout 2012. In the minds of analysts, last night’s jobs data gives credence to this policy, meaning that future RBA rate cuts may be on the cards sooner rather than later - bad news for the Aussie.

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TAGS: Australian Dollar Forecasts Daily Currency Updates New Zea Forecasts