Pound to New Zealand Dollar (GBP/NZD) Exchange Rate Falls as NZ Dollar Regains Strength from RBA Rate Cuts

Modified: Wednesday, 4 February 2015 20:38 BST - Written by Ben Hughes

STORY LINK Pound to New Zealand Dollar (GBP/NZD) Exchange Rate Falls as NZ Dollar Regains Strength from RBA Rate Cuts

Pound Falls as New Zealand Dollar (GBP/NZD) Regains Strength from RBA Rate Cuts

The Pound softened against the New Zealand Dollar after the NZD recovered some of its losses from earlier in the week.

The New Zealand Dollar initially fell on news that the Reserve Bank of Australia had slashed interest rates after months of scrutiny from investors and economists.

Trader Michael Johnston commented: ‘The ‘Kiwi’ looks like it has turned around a little bit – maybe seen its near-term bottom.’ In addition, the latest dairy auction saw an improvement in dairy prices, which provided some stability for the commodity currency.

Meanwhile, the Reserve Bank of New Zealand offered a sturdy hand to the ‘Kiwi’ when Governor Graeme Wheeler reiterated that he hoped interest rates would remain stable for some time.

He stated: ‘A period of OCR stability is the most prudent option.’ However, Wheeler did suggest that the currency was likely to weaken more as it remains ‘unjustified and unsustainable’ against other majors despite the fact it has softened in recent weeks. The central banker continued: ‘We expect to see a further significant depreciation.’

Other factors that influenced the NZD were New Zealand’s Unemployment Rate and Employment Change stats released on Tuesday.

Employment expanded by 3.5% on the year in Q4 which pulled the annual statistic higher to 3.5%. Unemployment also increased from 5.4% to 5.7%.


However, as the economy expands and more people enter the labour market, unemployment is likely to increase.

Industry expert Steven Joyce commented: ‘The New Zealand economy is continuing to crank out strong job growth in this latest survey. New Zealand continues to fare better than most of the OECD since the global financial crisis. The average unemployment rate across the OECD is currently at 7.2%.’

Pound to NZ Dollar Exchange Rate

Meanwhile, the UK had some positive news when the services sector grew by more than expected.

The Services Purchasing Managers Index (PMI) rose from 55.8 to 57.2 in January—a development that offered the Pound a little support. Industry expert David Noble stated: ‘The dominant sector in the UK continues to lead the way with strong growth and robust activity at the start of the year, now for 25 months in succession and at a level which shows confidence for the coming months.’

Wednesday will see the release of UK New Car registrations, which showed growth of 8.7% in December on the year.

With no further domestic data for New Zealand out in the rest of the week, the ‘Kiwi’ is likely to fluctuate as a result of global developments.

New Zealand Dollar Exchange Rates Today:

The New Zealand Dollar to Australian Dollar exchange rate is +0.61 pct higher with a conversion rate of 1 NZD equals 0.95010 AUD.
The New Zealand Dollar to Canadian Dollar exchange rate is +1.79 pct higher with a conversion rate of 1 NZD equals 0.92848 CAD.
The New Zealand Dollar to Euro conversion rate is +1.15 pct higher at 0.64728 NZD/EUR.
The New Zealand Dollar to Pound Sterling exchange rate converts +0.33 per cent higher at 1 NZD is 0.48577 GBP.
The New Zealand Dollar to US Dollar exchange rate today is converting +0.83 per cent higher at 0.73923 NZD/USD.
The New Zealand Dollar to South African Rand exchange rate converts +1.59 per cent higher at 1 NZD is 8.47355 ZAR.

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