Currency News

Daily Exchange Rate Forecasts & Currency News

Pound to New Zealand Dollar Sinks as Risk-On Market Mood Uplifts ‘Kiwi’

February 2, 2021 - Written by John Cameron

GBP/NZD Exchange Rate Falls on US Stimulus Hopes

The Pound to New Zealand Dollar fell today, with the pairing currently fluctuating around NZ$1.90.

The New Zealand dollar rose today as risk-sentiment has improved following growing confidence in the United States announcing and passing its gigantic $1.9 trillion stimulus package.

Today saw the release of the latest New Zealand Global Dairy Trade Price Index, which rose by 1.8%.

Analysts at Agriland commented:

‘Butter milk powder (BMP) was the big winner at today’s event, recording a 10.7% rise in index. Butter, lactose (LAC), cheddar and whole milk powder (WMP) also performed strongly, recording index increases of 6.2%, 3.8%, 2.3% and 2.3% respectively.’

Consequently, confidence is growing in one of New Zealand’s largest commodities – dairy – as prices continue to bounce.

In New Zealand economic data, this evening will see the publication of the latest Unemployment Rate for the fourth quarter, which is expected to rise by 5.6%.

As a result, we could see the ‘Kiwi’ begin to slide as the outlook for the nation’s economy and labour crisis drags on the nation’s economic sentiment.

Pound Falls Despite UK Government Ramp-Up of Vaccinations

Sterling fell against the New Zealand Dollar today despite the UK Government continuing to ramp up its Covid-19 vaccination programme.

However, the Pound struggled against the ‘Kiwi’, which is being bolstered by improving global risk sentiment.

In UK economic news, today saw the release of January’s Nationwide Housing Prices data, which fell below forecasts by -0.3% month-on-month.

Robert Gardner, Nationwide Chief Economist, said:

‘To a large extent, the slowdown [in January] probably reflects a tapering of demand ahead of the end of the stamp duty holiday, which prompted many people considering a house move to bring forward their purchase.

‘While the stamp duty holiday is not due to expire until the end of March, activity would be expected to weaken well before that, given that the purchase process typically takes several months.’

As a result, some GBP investors are becoming increasingly jittery about the prospects for the British housing market going forward.

GBP/NZD Forecast: Could the UK Government’s Speedy Vaccine Programme Boost Sterling This Week?

New Zealand Dollar traders will be awaiting tomorrow’s publication of the latest NZ Building Permits data for December.

Any improvement in the outlook for New Zealand’s construction sector would be NZD-positive.

Meanwhile, GBP traders will be eyeing tomorrow’s release of the final UK Services PMI for January, which is expected to confirm consensus at 38.8.

As a result, we could see Sterling suffer as the UK’s largest sector suffers from the Covid-19 lockdown.

The GBP/NZD exchange rate will remain sensitive to the UK’s coronavirus situation and vaccine rollout programme. If daily cases continue to drop, however, Sterling could head higher against the ‘Kiwi’.

Like this piece? Please share with your friends and colleagues:

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: New Zealand Dollar Forecasts Pound New Zealand Dollar Forecasts

Comments are currrently disabled