Pound to New Zealand Dollar Exchange Rate Today: GBP/NZD Declines

Modified: Thursday, 4 September 2014 20:55 BST - Written by Tim Boyer

STORY LINK Pound to New Zealand Dollar Exchange Rate Today: GBP/NZD Declines

The Pound to New Zealand Dollar exchange rate initially began the mid-week session on the back foot as worries over Scottish Independence damaged sentiment towards the UK currency. The currency managed to regain some support however, as a PMI report came in positively.

The New Zealand Dollar also found support early in the session after data showed that building work in the South Pacific nation saw an increase in activity in non-residential construction.

According to the data published by statistics New Zealand, the volume of building work rose by a seasonally adjusted figure of 1% in the second quarter of the year. The amount was a sharp drop from the 15% pace seen in the first quarter. Residential construction activity however remained stable at 14% in the first quarter.

‘The trend for residential building work has been rising for 11 quarters, and is now 68% higher than the most recent low point in the September 2011 quarter. However, it is still 7% lower than the series maximum in the June 2004 quarter,’ said Statistics New Zealand in its report.

The construction sector has been a major supporter of the New Zealand economy in recent years as the rebuilding of earthquake damaged Canterbury continues apace. A shortage of housing in Auckland has also boosted the building sector.

Today's figures show Canterbury building activity was worth $970 million in the June quarter, up 5.6% in the quarter and adding to the 24% jump in the March period.

Also aiding demand for the ‘Kiwi’ was increased demand for riskier assets as the situation in Ukraine improved markedly after news broke that Ukraine’s President Petro Poroshenko reached a deal with Russian President Vladimir Putin to start a permanent ceasefire in the Donbass region of eastern Ukraine.

Sterling managed to regain some lost ground after data showed that activity in the UK’s Services PMI advanced to its best level in 10-months. The PMI increased to a reading of 60.5, up from July’s figure of 59.1 and was better than the 58.5 figure expected by traders.


The report was bittersweet however as the report suggests that the Ukraine crisis the Ukraine crisis has clouded the sectors outlook. New business growth at Britain’s service sector firms was the weakest in three months, and confidence fell to a 15-month low. Hopefully, the
announced ceasefire will reverse the negative trends.

Markit now thinks that the UK economy will expand by 0.8% in the third quarter.

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