GBP NZD Exchange Rate Slumps on Dairy Auction Results

Published: Wednesday, 3 August 2016 08:00 BST - Written by Frank Davies

STORY LINK GBP NZD Exchange Rate Slumps on Dairy Auction Results

New Zealand Dollar Exchange Rates Supported by Dairy Price Gains

The middle part of yesterday’s European session brought the publication of a highly positive data release for the New Zealand Dollar (currency : NZD). The latest online GlobalDairyTrade auction results showed a hefty 6.6% jump in the average hammer price compared to the last result of two weeks ago. Even more encouragingly for the Kiwi Dollar was the increase of almost 10% in the fetching price of New Zealand’s number one export – Whole Milk Powder (WMP) from USD2,079 to USD2,265. This result marginally eclipsed 17th May’s result of USD2,252 and was the highest fetching price for WMP since mid-December’s result of USD2,304.

GBP/NZD Conversion Rate Slumps Ahead of BoE Decision

The Pound Sterling New Zealand Dollar exchange rate slumped to 1.8447 GBP NZD as a result and analysts forecast that there could be further losses to come for the pair if, as expected, the Bank of England announces a substantive easing of its already loose monetary policy tomorrow afternoon.

Looking ahead, market-watchers will have to wait until 1500hrs BST for today’s most significant data release. June’s US ISM Services / Non-Manufacturing Composite survey printed at a healthy 56.5, (anything above a reading of 50 for a PMI survey represents an expansion in activity levels). However, the July version, out today, is expected by analysts to point to a slowing of the pace of expansion in America’s tertiary sector, with a showing of 55.9 the consensus expectation amongst analysts.

US Dollar Forecast: USD Could Fall on Sliding Fed Rate Hike Bets

At the time of writing, futures markets price in only a 61.2% implied chance that US interest rates will remain at their current banding of between 25 and 50 basis points by the end of the year. If today’s ISM survey prints at significantly below analysts’ expectations, then expect this percentage chance to increase and the US Dollar (currency : USD) to give up further ground against the other sixteen most actively traded global currencies.

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