The ‘Kiwi’ appreciated even more against the Pound.
Foreign Currency Market Update – GBP / NZD Update
The Pound slid down against the New Zealand Dollar by 1 cent on Wednesday as positive ecostats from the United States reflected well on the prospects of New Zealand’s important export industry. US Durable Goods Orders rebounded from April’s dismal -0.2% decline to post a positive growth of 1.1% in May and Pending Home Sales exceeded analysts’ expectations of 9.9% and came in strongly at 15.3%. In the hours immediately following the two US releases the Pound to New Zealand Dollar exchange rate dropped from 1.9772 to 1.9671.
The ‘Kiwi’ appreciated even more against the Pound in early morning trading on Thursday. Despite the National Bank of New Zealand Business Confidence and Activity Outlook figures both hitting 15-month lows at 12.6% and 20.8% respectively, the New Zealand Dollar gained 0.7 cents against Sterling on the releases, with GBP/NZD falling from 1.9671 to 1.9594. Sterling managed to consolidate its losses through the day on Thursday as markets anticipated an uninspiring fallout to the EU summit in Brussels. Subsequently the rate rose back up to 1.9760.
The crisis summit proved far more effective than first thought with the major development that direct bank funding will allow the recapitalisation of banks at affordable interest rates, giving traders the stimulus that they needed to mount a worldwide rally. Due to its strong correlation with risk trends and commodities, the New Zealand Dollar posted 2 cent gains against the Pound within 2 hours of the announcement.
It will be interesting to see how long before the infatuation from the summit wears off and how lasting the effects will be. In the meantime the next key events to look out for are US ISM Manufacturing on Monday, UK Construction PMI on Tuesday and the BoE Asset Purchase Target for June announced on Thursday morning.
If the Bank of England announce additional stimulus measures then it could allow the ‘Kiwi’ to construct further gains against the Pound, but because of its extreme sensitivity to the Eurozone debt crisis, the New Zealand Dollar always carries the risk of volatility.
Summary of major upcoming data releases that we think may move the market.
- Pound Sterling to New Zealand Dollar Foreign Currency Exchange Rate Forecast – Kiwi stabilises as stock markets rebound…
- Weaker than anticipated New Zealand labour market figures, released in the middle part of last week’s session, caused pronounced selling pressure on the Kiwi Dollar.
- Pound Sterling to Australian Dollar Foreign Currency Exchange Rate Forecast – Kiwi surges 8% in four weeks
- Pound to New Zealand Dollar Exchange Rate Forecast: Sterling has been on the slide against the Kiwi Dollar
- Pound Sterling to New Zealand Dollar Foreign Currency Exchange Rate Forecast