Pound Sterling (GBP) to NZ Dollar (NZD) Exchange Rate Falls as New Zealand's Currency @ Best Levels

July 8, 2014 - Written by David Woodsmith

STORY LINK Pound Sterling (GBP) to NZ Dollar (NZD) Exchange Rate Falls as New Zealand's Currency @ Best Levels

The Pound to New Zealand Dollar (GBP/NZD) exchange rate weakened today, with the currency pair trading down to 1.9449 on below forecast data. The Sterling also softened against the US Dollar (USD) trading in the region of 1.7092.

May’s Industrial Production YoY figures dropped to 2.3%, evading the forecast of a rise to 3.2% from April’s 2.9%. Meanwhile May’s Manufacturing Production was predicted to climb to 5.6% from the former April figure of 4.3%; instead the figure was published as a disappointingly low 3.7%.

On Thursday, the Pound to New Zealand Dollar exchange rate is 0.04 per cent lower on the day at 1.94336 GBP/NZD.

Pound Sterling Weakens Across the Board

The UK has been releasing consistently impressive data recently; however Tuesday’s figures have caused the Pound Sterling (GBP) to weaken against currency peers. Thursday could enable the British asset to gain back some of its losses from today however, with the Bank of England’s Interest Rate Decision and Asset Purchase Target revealed, alongside Trade Balance data.

With speculation surrounding the UK’s interest rate hikes, Thursday is hoped will gain some clarity from the BoE in regards to timeframe. In Mark Carney’s last discussion regarding interest rates, the Pound softened as he declared the rate rises wouldn’t be executed as swiftly as first thought.

Veteran City representative, David Bulk, commented: ‘It might be folly to start chucking up the interest rates now. Mark Carney is doing what he is supposed to be doing with forward guidance. If the economic factors change then his outlook has to change. The last time he spoke was to say, having been very strong at the Mansion House speech that rates would go up sooner rather than later, they were unlikely to go up before the turn of the year.’

However with such inconsistencies in Carney’s direction for the UK interest rate hikes, the Pound falls victim to softening. Currently speculation for both the UK and US rate hikes are in the spotlight with hopeful enlightening this week following the US meeting minutes and the UK rate decision. Economists for Commerzbank suggested: ‘Janet Yellen [Fed chairwoman] will be a close observer of whether Mark Carney can pull off his u-turn without causing too much volatility.’

New Zealand Dollar to US Dollar Forecast Could See Losses Today

Meanwhile the New Zealand Dollar (NZD) appears in a precarious place against the US Dollar (USD) also; ready to soften in the light of positive US data. The ‘Kiwi’ is struggling to remain in the 88cents region after frequently breaking through the barrier, currently trading at 0.8794. However with the ‘Greenback’ currently trading weaker against the other majors, the ‘Kiwi’ appears stable for now.

Westpac representative Imre Speizer stated: ‘The “Greenback” is weaker. American’s came back from holidays in a pessimistic mood and pushed down interest rates, pushed down equities, pushed down their Dollar.’

In a relatively quiet data week, Wednesday could prove influential for the ‘Kiwi’ with the release of the New Zealand Performance of Manufacturing Index. Tuesday morning however has shown the New Zealand Institute of Economic Research second quarter survey of Business Opinion fall quite dramatically, now residing at 32, falling from the previous 52.

The dip in Business Opinion data however has only caused a slight dip to the ‘Kiwi’. An expert in the field, Stuart Ive, stated: ‘The ‘Kiwi’ continues to defy gravity against the US Dollar but we had a blip on the radar on the downside after the business opinion survey.’

As the UK and New Zealand have both received disappointing data today, the currency pairing has fluctuated. The Sterling has declined against the ‘Kiwi’ since yesterday’s close, and the Pound to NZ Dollar exchange rate (GBP/NZD) pairing may be volatile during the coming week. New Zealand remains relatively quiet by way of data and will be looking to the US figures to determine movement. However the UK has a data heavy week with discussions of interest rate hikes which will no doubt affect the Pound.

Update 09/07/2014 - NZD Hits Almost Record Levels, Pound Struggles against NZ Dollar

After Fitch, one of the world’s top three credit ratings agencies, announced that it was positively revising New Zealand’s outlook the commodity-driven currency broadly strengthened.

The New Zealand Dollar to US Dollar exchange rate (NZD/USD) approached an almost record high and advanced by 0.3% against the Pound. The GBP/NZD exchange rate was little affected by a report showing that the level of retail card spending in New Zealand unexpectedly stagnated in June.

Economists had anticipated a month-on-month increase of 0.2%.

New Zealand Dollar Exchange Rates - Revised 10th June 2014

The Pound to New Zealand Dollar exchange rate is trading down -0.04% at 1.94336 GBP/NZD.
The Euro to New Zealand Dollar exchange rate is trading up +0.04% at 1.54672 EUR/NZD.
The US Dollar to New Zealand Dollar exchange rate is trading up +0.24% at 1.13589 USD/NZD.

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound New Zealand Dollar Forecasts