Forex - GBP to NZD Exchange Rate Mixed Day, NZ Dollar Higher vs Euro + Sterling

Modified: Friday, 26 September 2014 15:05 BST - Written by Toni Johnson

STORY LINK Forex - GBP to NZD Exchange Rate Mixed Day, NZ Dollar Higher vs Euro + Sterling

The Pound to New Zealand Dollar exchange rate (GBP/NZD) made strong gains during the mid-week session after Fonterra reduced its payout to the nation’s dairy farmers for the current season as dairy prices declined.

Fonterra reduced its forecast payout to farmers from $6 to $5.30 per kilogram of milk solids for the 2015 season as global dairy prices continued its decline.

The reduced payment added to the negative views on the ‘Kiwi’. Also weighing upon the currency was continuing concerns over the strength of the Chinese economy. The world’s second largest economy is New Zealand’s second largest trading partner.

The latest NZ Dollar conversions today:

The New Zealand Dollar to Australian Dollar exchange rate is trading down -0.33% at 0.90930 NZD/AUD.
The New Zealand Dollar to Canadian Dollar exchange rate is trading down -0.1% at 0.89333 NZD/CAD.
The New Zealand Dollar to Euro exchange rate is trading up +0.45% at 0.63145 NZD/EUR.
The New Zealand Dollar to Pound Sterling exchange rate is trading up +0.28% at 0.49403 NZD/GBP.
The New Zealand Dollar to US Dollar exchange rate is trading down -0.07% at 0.80712 NZD/USD.

‘The market had pretty well priced in the entire Fonterra forecast. The ‘Kiwi; would have gone down a little bit further, but we had Japan’s Abe say for a second day in a row he was concerned about a weakening Yen,’ said Martin Rudings, the senior forex dealer at the Wellington based OMF.


Earlier in the session, the New Zealand Dollar was receiving support from the publication of the latest trade deficit data. Figures showed that the nation’s trade deficit narrowed more than forecast in August. The trade deficit narrowed to $472 million last month as falling imports and rising exports of dairy goods and cattle narrowed the shortfall. Analysts had expected the trade deficit to widen to NZ$1,275 million in August.

The report showed that exports rose by NZ$3.52 billion last month, beating expectations for an increase of NZ$3.15 billion.

The ‘Kiwi’ was also under mounting risk aversion as the conflict against the Islamic State intensified in Iraq and Syria. The UK’s parliament is widely expected to vote on Friday whether to order the Royal Air Force to join in with launching airstrikes against Islamist militants.

The Pound was continuing to find support from last week’s Scottish Referendum result. Investors are looking to see whether the UK’s monetary policy will change now that the issue has been decided.

Further gains for the UK currency were restrained after a report published on Tuesday showed that UK public sector borrowing increased from the preceding year in August. A separate report also showed that the number of mortgages approved fell unexpectedly last month.

A lack of market moving UK data is also likely to limit the GBP/NZD exchange rates movement.

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