New Zealand Dollar Today: GBP to NZD Exchange Rate Softer as Pound Sterling Factors in Forecast UK Jobless Rate

May 13, 2014 - Written by Tim Boyer

STORY LINK New Zealand Dollar Today: GBP to NZD Exchange Rate Softer as Pound Sterling Factors in Forecast UK Jobless Rate

While today’s UK retail sales report added to the picture of the UK’s improving economy and supported the argument for the Bank of England bringing forward its timeline for increasing interest rates, the Pound to New Zealand Dollar exchange rate (GBP/NZD) was trending in a weaker position throughout European trading.

Some investors engaged in a bit of profit taking before tomorrow’s UK employment report and the Pound lost momentum against several of its major rivals.

The Pound Sterling to New Zealand Dollar exchange rate is trading down -0.46% at 1.94788 GBP/NZD.

Sterling pared gains against the US Dollar and slid against both its Australian and New Zealand counterparts over the course of the local session.

Tomorrow’s UK employment report is expected to show that the UK jobless rate fell from 6.9 per cent to 6.8 per cent in the three months to March. As the result has largely been priced into the market it would take a considerable surprise to the upside to push the Pound much higher, though it could recover ground against the ‘Kiwi’ if data meets expectations.

Conversely, a disappointing jobs report could see Sterling weaken. The Bank of England’s inflation report could also have a considerable impact on the GBP/NZD exchange rate tomorrow.

In the opinion of Royal Bank of Scotland strategist Paul Robson; ‘This looks like a Pound Story today, people squaring up ahead of the event risk tomorrow. Expectations for a hawkish signal from the BoE have reached fever pitch. We are far less sure’.

GBP NZD exchange rate forecast down to retail sales report tonight.

However, before that the direction taken by the GBP/NZD pairing will be down to New Zealand’s retail sales report – due out at 23:45 GMT.

Economists have forecast that retail sales excluding inflation were up 0.9 per cent in the first quarter of the year following a gain of 1.2 per cent in the final quarter of 2013.

Earlier this month data showed that the level of electronic card retail spending in New Zealand was up by 5.7 per cent in April, year-on-year, versus expectations for a reading of 5.1 per cent.

Other economic reports to be aware of tomorrow include final German inflation figures, industrial production data for the Eurozone and the US MBA mortgage applications report.

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TAGS: Forecasts