Pound to New Zealand Dollar Rate 5-Day Forecast: Bank Holiday Finds Pound Sterling Tick Higher (1 GBP = 1.78283 NZD)

Modified: Monday, 28 August 2017 13:50 BST - Written by John Cameron

STORY LINK Pound to New Zealand Dollar Rate 5-Day Forecast: Bank Holiday Finds Pound Sterling Tick Higher (1 GBP = 1.78283 NZD)

The Pound to New Zealand Dollar exchange rate edges higher on the UK Bank Holiday (28th August), quoted at NZ$1.78283.

The NZD-impacting events in the next seven days include the Building Consents, the ANZ Business Confidence, the Overseas Trade Inde and the ANZ Commodity Prices.

British Pound (GBP) Rises Despite Brexit and Growth Concerns

GBP/NZD strengthened last week as markets reacted to the UK’s latest GDP figures.

Sterling started the session trading in a narrow range against the New Zealand Dollar this week as markets expressed increased concerns about the impact of Brexit, particularly in light of recent reports that potential trade talks with the EU may be delayed due to a lack of progress on the UK’s withdrawal agreement.

These concerns also overshadowed the UK’s latest public sector finance report on Tuesday as the Office for National Statistics reported that government spending resulted in an unexpected surplus in July.

However Sterling began to make some headway overnight on Wednesday as it exploited the weakness in the New Zealand Dollar.

The Pound was able to build on these gains at the start of the European session on Thursday as the ONS revealed that Britain’s GDP rose in line with expectations in the second quarter, quashing fears that a slowdown in retail sales in June may have caused growth to have missed.


However with growth still remaining relatively subdued at just 0.3% in the second quarter and growing concerns that the GDP may slip again later in the years thanks to a lull in business investment and a slowdown in consumer spending the GBP NZD exchange rate was forced to cede some ground later that day.

Samuel Tombs Chief UK economist at Pantheon Macroeconomics, said, ‘Looking ahead, we expect the economy to continue to struggle, with GDP rising by just 0.2% in both Q3 and Q4. Recent surveys of export orders have picked up, but exporters are too reliant on imports for net trade to fully offset a further slowdown in consumers’ spending. Indeed, CPI inflation still has further to climb, and the sharp fall in consumers’ confidence over the last two months suggests that households won’t continue to cut their saving rate. Meanwhile, we expect Brexit risk to increasingly bear down on business investment as the UK’s exit date draws nearer.’

New Zealand Dollar (NZD) Slumps despite Better than Expected Trade Figures

The New Zealand Dollar has struggled this week despite the sole piece of domestic data easily beating expectations.

According to Statistics New Zealand (StatsNZ) the country posted a NZ$85m trade surplus in July, and although down from a NZ$242m surplus seen the month before it was significantly better than the NZ$200m deficit that economist had predicted.

The jump was largely attributed to soaring exports of milk powder, butter and cheese, supported by the rise in dairy prices since last year.

StatsNZ said, ‘The rise in exports was led by higher values across a variety of commodities, especially milk powder, butter, and cheese – up $426 million (51 percent).’

‘The rise in dairy was the largest for any month since March 2014. The value of whole milk powder per tonne was one-third higher than a year ago, while the quantity was up 12 percent. International dairy product auction prices rose sharply in the second half of 2016.’

However this was not enough to offset movement in the currency markets, with the main cause for the New Zealand Dollar’s weakness this week appears to have been driven by the decline in market risk appetite ahead the central bank summit at Jackson Hole, with investors becoming increasingly cautious ahead of key speeches by the Federal Reserve and the European Central Bank (ECB).

GBP NZD Exchange Rate Forecasts Focus on ANZ Business Data

Looking ahead the GBP NZD exchange rate may slip at the start of next week as thin trade volumes caused by the closure of UK markets for the bank holiday weekend and a lull in UK data leaves the Pound will little momentum to propel it higher until the release of the latest Housing data on Wednesday.

Meanwhile the ‘Kiwi’ may be in the same boat next week with a lull in notable data until the release of ANZ’s Business confidence index, with the New Zealand Dollar likely to rise if business sentiment rises as expected.

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