Pound to New Zealand Dollar Exchange Rate Today - GBP NZD Edges Lower, AUD NZD Holds Firm

August 13, 2014 - Written by David Woodsmith

STORY LINK Pound to New Zealand Dollar Exchange Rate Today - GBP NZD Edges Lower, AUD NZD Holds Firm

The British Pound to New Zealand Dollar pair weakened sharply during the mid-week session, along with most of GBP's major exchange rate peers after the Bank of England cur its wage growth forecast and said that wages will be crucial on when interest rates will rise. The GBP NZD exchange rate sits today at 1.96474.

Expectations for the Bank of England to raise interest rates before the end of the year tumbled after data released by the Office for National Statistics showed that average earnings in the second quarter of the year increased by just 0.6%, pay including bonuses contracted by 0.2% the first fall recorded since 2009.

The key NZD FX levels today are:

- The New Zealand Dollar to Australian Dollar exchange rate is trading up 0.05 per cent at 0.91097 NZD/AUD.
- The New Zealand Dollar to Euro exchange rate is 0.06 pct higher at 0.63508 NZD/EUR.
- The New Zealand Dollar to Pound exchange rate is trading 0.14 per cent higher at 0.50897 NZD/GBP.
- The New Zealand Dollar to US Dollar exchange rate is up 0.17 per cent at 0.84947 NZD/USD.

The Central Bank also slashed its wage growth forecast for 2014 to just 1.25%. The cut has raised investor concerns over the overall strength of the country’s economic recovery and increased uncerntainty as to when interest rates will rise.

“To read between the lines, the message today is that rates are still destined to rise, but when that will be is still up for debate. The fickle nature of the UK economy seems to keep everyone guessing. Any rate rises will be small, but even very small rises in interest rates will have a significant effect on what is still a fragile economy. That said , savers thinking that the ‘good old days’ of high interest rates will return are going to be sorely disappointed and the sooner we adapt to this environment the better,” said Neil Lovatt, director of financial products at Scottish Friendly.

Traders largely ignored a separate report, which showed that the UK’s unemployment rate fell to 6.4% in the last quarter. The drop matched economist forecasts and was an improvement from the 6.5% recorded in May. The data also showed that the number of UK citizens claiming unemployment benefits dropped by 33,600 last month, better than the decline to 30,000 expected by economists.


“The market is busy pushing back its interest-rate hike expectations well into 2015,” said Neil Jones, head of hedge-fund sales at Mizuho Bank Ltd. in London. “That is the key why the pound is being sold across the board. There was some expectation and pre-announcement bullishness; however, given the downward revision in wage projections and the ‘gradual and limited’ words again, the market is selling the pound.”

The New Zealand was able to make strong gains against Sterling due to the weak UK data and as demand for the US Dollar weakened after the latest US retail sales data came in below economist expectations.

According to the US Commerce Department, US retail, sales were flat in July disappointing expectations for a rise. The data is likely to reduce speculation for an early interest rate rise by the Federal Reserve and has raised concerns over the strength of the world’s largest economy.

The New Zealand could make further gains overnight as the latest retail sales data for the nation is due for release. Economists are expecting that retail sales increased from 0.7% to 1.0% in the second quarter of the year. On a year on year basis sales are forecast to rise by over 4%.

GBP NZD Update 14/08/2014

The New Zealand Dollar (NZD) made strong gains against the weakened Pound (GBP) on Thursday after the UK currency was hit by poor wage growth data which caused investors to reduce their bets for an interest rate rise before the end of the year. The Kiwi made gains after retail sales data beat expectations.

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