The GBP NZD exchange rate has been locked in a strong downtrend since it broke to a 14-month high of 2.1056 on 23rd May.
Foreign Currency Market Update – GBP / NZD Update
The New Zealand Dollar has continued to strengthen against the Pound during the past week, thanks to the release of further downbeat UK economic data and a pick-up in appetite for riskier assets including the Kiwi Dollar amongst global investors. Last Wednesday night’s confirmation from the Reserve Bank of New Zealand that it would not be cutting its key lending rate triggered further support for the Kiwi Dollar. Analysts had been expecting the RBNZ to maintain interest rates at 2.5%, however the tone of Governor Alan Bollard’s post-announcement comments provided encouragement for investors holding NZD-denominated assets. Bollard stated that, ‘it remains appropriate for monetary policy to remain stimulatory’, suggesting that a surprise rise in the RBNZ’s bank rate had been under consideration by the Bank’s committee members. Meanwhile, in the UK, last Friday’s British import and export data for April revealed a trade deficit of over £10bn. This was the worst monthly figure since 2005, highlighting the severe deficiencies which remain in Britain’s economy.
The GBP NZD exchange rate has been locked in a strong downtrend since it broke to a 14-month high of 2.1056 on 23rd May. Last Friday’s move to a 7-week low of 1.9748 sent out a strong negative indicator for the pair. GBP NZD has traded close to this level in the early part of today’s session, following a strong showing by pro-bail-out parties in yesterday’s Greek general election which has ensured that appetite for riskier assets, including the New Zealand Dollar, remains buoyant. With the minutes of the latest Bank of England monetary policy meeting due for release on Wednesday morning, the spectre of further Quantitative Easing looms over the Pound. If the minutes reveal that the Bank’s nine-man monetary policy committee did discuss the provision of further stimulus for the beleaguered UK economy, then GBP NZD’s downward move could gather momentum, making mid-February’s 10-month low of 1.8634 a realistic near-term target.
Summary of major upcoming data releases that we think may move the market.
- GBP CAD’s recovery has continued over the past week
- Pound to New Zealand Dollar Exchange Rate Forecast: A light schedule of domestic data releases during last week’s session failed to hold back the New Zealand Dollar
- Pound Sterling to New Zealand Dollar Foreign Currency Exchange Rate Forecast – Kiwi stabilises as stock markets rebound…
- Pound to Euro Exchange Rate Forecast: Prospects for the GBP EUR exchange rate have been shaped by two key risk events in mainland Europe over the past week
- Pound Sterling, the Euro and US Dollar exchange rate News – The Pound has swung between gains and losses in the past week