Pound to NZ Dollar Exchange Rate Higher on Dovish RBNZ and Sterling Priced-in Scottish Uncertainty

September 10, 2014 - Written by Frank Davies

STORY LINK Pound to NZ Dollar Exchange Rate Higher on Dovish RBNZ and Sterling Priced-in Scottish Uncertainty

The Pound to New Zealand Dollar exchange rate (GBP NZD) was holding ground as investors eased off from the currency pairing ahead of Thursday’s RBNZ interest rate policy review, economists are widely forecasting that the Central Bank will choose to leave rates unchanged.

RBNZ governor Graeme Wheeler is expected to leave interest rates at 3.5% after he signalled a pause in interest rate hikes in July. The reason for leaving rates unmoved was being blamed because of the nation’s inflation rate being softer than expected and an attempt to aid the economy from the ill effects of declining commodity prices.

Where does the NZ Dollar sit in today's conversion rates?

The New Zealand Dollar to Australian Dollar exchange rate is trading up +0.35% at 0.90267 NZD/AUD.
The New Zealand Dollar to Canadian Dollar conversion rate is trading up +0.06% at 0.90368 NZD/CAD.
The New Zealand Dollar to Euro exchange rate is trading down -0.02% at 0.63301 NZD/EUR.
The New Zealand Dollar to Pound exchange rate is trading down -0.09% at 0.50312 NZD/GBP.
The New Zealand Dollar to Singapore Dollar exchange rate is trading down -0.15% at 1.03246 NZD/SGD.
The New Zealand Dollar to Lira exchange rate is trading up +0.04% at 1.80039 NZD/TRY.
The New Zealand Dollar to Dollar exchange rate is trading down -0.03% at 0.81795 NZD/USD.
The New Zealand Dollar to Rand exchange rate is trading down -0.01% at 8.97447 NZD/ZAR.

‘Everybody’s pacing until Wheeler tomorrow. ANZ is expecting quite a neutral statement and for Wheeler to reiterate concerns about the currency. The ‘Kiwi’ has had a fairly steady grind lower and tomorrow should reiterate that, and continue that trend,’ said Sam Tuck, senior FX strategist at the Auckland based ANZ Bank New Zealand.

Sterling meanwhile remains under significant pressure from fears over the upcoming Scottish Referendum vote. With polls suggesting that the outcome is too close to call, the markets are jittery over the uncertainty of the situation. Concerns are building over what currency an Independent
Scotland will use after Bank of England Governor Mark Carney ruled out the prospect of a currency union at a speech to trade unionists on Tuesday.

The Pound could regain more ground against the New Zealand Dollar and other major peers later in the session when Mr Carney and other Bank of England policy makers testify on last month’s inflation report.

If there are signs of dissent between the policy makers then we could see the Pound rise.

“Mr. Carney argued in favor of an initial rate hike by spring of 2015 with gradual tightening thereafter in a speech in Liverpool yesterday. At least one of his colleagues also due to testify sees that as too dovish considering Mr. Weale was one of the two dissenting votes in favor of an August rate increase. The British Pound paused to digest losses yesterday, ending a 5-day losing streak, as feverish fears of the looming Scottish Independence referendum cooled absent novel news-flow (as expected). If the cumulative tone of BOE officials’ rhetoric betrays a growing hawkish consensus, the UK unit may at last find fuel for a meaningful recovery,’ said Ilya Spivak, a currency strategist from DailyFX.

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