New Zealand Dollar Exchange Rates Today - GBP Pound Weaker vs NZD, US Dollar Shows Dominance

Modified: Wednesday, 6 August 2014 11:12 BST - Written by Tim Boyer

STORY LINK New Zealand Dollar Exchange Rates Today - GBP Pound Weaker vs NZD, US Dollar Shows Dominance

The Pound to New Zealand Dollar strengthened against the on Tuesday after it found support by the release of stronger than forecast service sector Purchasing Managers Index data. The GBP/NZD exchange rate currently sits at 1.99075.

According to the PMI report released by Markit, the UK service sector expanded at its fastest pace since November 2013, an eight-month high.

The data increased the likelihood that the nation’s economic recovery will continue for the near future and could lead to the Bank of England raising interest rates before the end of this year. \r\n\r\nThe positive service data counters some of the effects caused by a manufacturing PMI released last week, which showed that activity in that sector declined to a one-year low last week.

The Markit/CIPS purchasing manager’s index for services rose to 59.1 in July, up from 57.7 in June, well clear of the benchmark of 50 that signals expansion.\r\n\r\nOver 30% of the survey panel reported an increase in activity since June.

“The vast services economy’s growth surge shows no sign of abating. The July PMI showed the sector expanding at the fastest rate since last November, as demand for services continued to increase at a rate rarely seen in the survey’s 18-year history. The buoyancy of the services and construction sector PMIs suggest the domestic economy clearly continued to boom in July, offsetting the cooling of growth seen in the manufacturing sector,” said Markit’s chief economist Chris Williamson.

Because of the positive PMI, the Pound regained strength as economists increased their bets that the Bank of England could change its prediction that the UK economy will weaken slightly in the second half of the year.

Expectations are growing that some Bank of England policy makers could vote to raise interest rates at this week’s BoE policy meeting.

"The pick-up in the composite PMI somewhat increases the chances that the Monetary Policy Committee decides to raise interest rates before the end of the year, and may even produce a split interest rate vote (this week) for the first time since July 2011,\" said Samuel Tombs at Capital Economics.


The New Zealand Dollar fell in a session, which has proven quiet for the currency. Traders are awaiting direction from upcoming central bank meetings in the Eurozone and UK. The ‘Kiwi’ has declined by 3% since the start of July as falling commodity prices and on speculation that the nation’s Central Bank could intervene in the forex markets to weaken the stubbornly high currency.

Wednesday will likely see the ‘Kiwi’ experience volatility against a number of major peers as the latest Fonterra Cooperative Group Global Dairy Trade auction takes place. The auction will act as a gauge on how the nation’s largest exporter is fairing after dairy prices fell to their lowest value since the end of 2012.

Unemployment data is also due to be published. Economists are expecting an improved figure and a lower overall unemployment rate.

Against the US Dollar, the currency fell after the latest ISM Non-manufacturing PMI report came in better than forecast.

The index expanded at its fastest pace in nine years in July. The index increased to 58.7 from the 56.0 recorded in June.

GBP to NZ Dollar Exchange News - Update 06/08/2014

GBP/NZD – Due to weaker production data out of the UK the Pound was weaker against an under pressure New Zealand Dollar. Against the US Dollar the ‘Kiwi’ fell to its lowest level in two months as domestic employment data disappointed economists and as dairy prices, New Zealand’s major export fell again.

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: Currency Predictions Daily Currency Updates