Pound New Zealand Dollar Exchange Rate Forecast: GBP/NZD Gains Predicted If Global Trade War Begins

March 26, 2014 - Written by John Cameron

STORY LINK Pound New Zealand Dollar Exchange Rate Forecast: GBP/NZD Gains Predicted If Global Trade War Begins

Highlights for today’s session in the global currency market include this afternoon’s US Durable Goods Orders data and this evening’s February Trade Balance numbers in New Zealand. Both the Greenback and the Kiwi Dollar have edged forward against the Pound over the past two weeks, sending the Pound US Dollar and Pound New Zealand Dollar exchange rates down towards the 1.6300 GBP/USD and 1.9000 GBP/NZD thresholds respectively.

A strong showing from this afternoon’s Durable Goods Orders data in the States will be required to further propel the GBP/USD further lower, but the pair looks primed for a downward move thanks to last week’s comments from new Federal Reserve Chairwoman Janet Yellen which suggested that the US central bank might be preparing for a bout of Quantitative Tightening as soon as the first half of 2015. Any further hints of such a move, which will take the form of a hike in interest rates, will be likely to trigger renewed support for the Buck and a strong print from this afternoon’s US figures will be likely to elicit further market babble to this effect.

Meanwhile, the New Zealand unit has been well bid since the Reserve Bank of New Zealand hiked its Official Cash Rate earlier this month. Strong trade figures are always a key positive for the Kiwi thanks to the New Zealand economy’s heavy dependence on exports of its raw materials. Analysts are therefore forecasting that the expected positive import/export numbers tonight will trigger further downside for the Pound New Zealand Dollar exchange rate GBP/NZD.

However, the recent go-ahead performance from the Kiwi could be put at risk if Russia’s policymakers decide to embark on a retaliatory course of action in response to the West’s sanctions which it has imposed since the annexation of Crimea. A damaging global trade war would hit the risk-sensitive Kiwi harder than most, potentially sending GBP/NZD back up through the two to one level.

Key Money Transfer Rates to New Zealand (Updated: 10AM GMT 26/03/2014)

The Pound Sterling to New Zealand Dollar exchange rate is trading down -0.45% at 1.92005 GBP/NZD.
The Euro to New Zealand Dollar exchange rate is trading down -0.6% at 1.60256 EUR/NZD.
The US Dollar to New Zealand Dollar exchange rate is trading down -0.43% at 1.16160 USD/NZD.
The Australian Dollar to New Zealand Dollar exchange rate is trading up +0.28% at 1.07180 AUD/NZD.

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