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Conflicting UK Data Releases Leave Investors Wary of UK Currency, GBP NZD Exchange Rate Crashes

January 11, 2017 - Written by Frank Davies

The Pound to New Zealand Dollar exchange rate continued to trend near the week’s worst levels on Thursday afternoon and is unlikely to recover by the end of the week due to a lack of incoming UK news.

The anticipated decision date of the UK Supreme Court is expected to be made at least three working days before judgement is confirmed and will continue to be a focus of GBP traders for the coming week.

[Previously updated 10/01/2017]

Fresh Northern Ireland Issues see Investors Ditch GBP NZD Exchange Rate

The current week has been a poor one for the Pound, with ambiguity in Government eroding confidence over Monday and Tuesday. More recently, the latest knock to investor confidence has been caused by political chaos in Northern Ireland.

Following the surprising resignation of Deputy First Minister Martin McGuiness on Wednesday, UK and NI politicians have been rushing to stabilise the situation, which threatens to see the hard-fought stability in Government crumble.

UK domestic data has failed to shift this current weakness in the Pound – on the positive side, annual construction output has climbed in November along with industrial and manufacturing production stats on the same month.

Less helpfully, however, a massive expansion in the November trade deficit from -1.55bn to -4.17bn has been seen.

Predictions for Pound New Zealand Dollar Exchange Rate: Possible GBP Gains on Rising GDP, Inflation Estimates

Incoming UK economic data could bring near-term positivity for the Pound, given the current forecasts that have been made for this week and next week’s UK ecostats.

Thursday afternoon is set to show a rise in the National Institute of Economic and Social Research (NIESR) GDP estimate for December, which is due to climb from 0.4% to 0.5%.

While the coming Tuesday’s inflation rate figures are set to rise on the month and the year, this might cause more concern than celebration, given the recent focus on wage disparity and the negative impacts of rising inflation when combined with slow wage growth.

New Zealand Dollar Pound Exchange Rate Strength Recorded during NZ Data Lull

Despite having little in the way of domestic data, the New Zealand Dollar has still been able to rise against Sterling today.

The only real news to speak of has concerned dairy prices, where the price of class 3 milk per hundredweight has continued its upwards trajectory since the start of the month.

NZD GBP Exchange Rate Forecast: Chinese Data in Focus before Next Week’s Confidence Stats

With New Zealand Dollar investors still holding out for the weekend’s next piece of direct domestic data, the NZD could be influenced in the meantime by Friday’s incoming Chinese economic announcements.

These will cover December’s trade balance, which includes the crucial imports figure as part of the announcement. As it stands, the current Chinese trade surplus is expected to expand, although unfortunately for New Zealand’s prospects, a drop in imports is expected.

When NZ data finally starts coming in next week, the NZD is expected to be moved by food inflation figures on Sunday, as well as Q4 business confidence on Monday night. In the latter case, a previous figure of 26% was recorded.

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