This week’s session sees a light schedule of data releases in both New Zealand and the UK, so levels on GBP NZD are likely to be determined by investor sentiment.
Foreign Currency Market Update – GBP / NZD Update
There has been considerable volatility for the GBP NZD exchange rate over the past seven days, following the steady range-trading of the six previous weeks. As last Monday’s session got under way, the pair was just about managing to hold above the 1.9000 level. The Reserve Bank of New Zealand’s policy decision on Tuesday saw domestic interest rates maintained at their current 2.50% level, as expected, but the RBNZ’s accompanying commentary did provide a surprise for investors, when it suggested that rates may be kept at their record low level of 2.50% for the remainder of the year. This took the GBP NZD exchange rate as all the way up to 1.9491 during Tuesday’s session – its highest level since 11th January.
However, the spike higher for GBP NZD failed to hold, as global risk sentiment picked up towards the end of the week, thanks to Greece’s debt swap agreement with investors holding Greek bonds. Friday afternoon’s US Non-Farm Payrolls figure, (considered a key barometer of the state of America’s labour market), significantly bettered expectations, causing market participants to regain their appetite for risk. The two combined to cause strong support for the Kiwi as Friday’s close approached, taking the pair back down to 1.9032, close to where it had started the week.
Looking ahead, this week’s session sees a light schedule of data releases in both New Zealand and the UK, so levels on GBP NZD are likely to be determined by investor sentiment. With the eurogroup of Finance Ministers likely to rubber-stamp Greece’s latest €130bn of bail-out funding at their Brussels summit later today and tension surrounding Iran’s nuclear stand-off with the West easing, it appears possible that the Kiwi will be favoured over the Pound. This could send the GBP NZD rate back into the 1.8000s, with the mid-February low of 1.8634 a short-to-medium term target. However, a flight to safety from institutional investors, perhaps triggered by renewed eurozone debt fears or an escalation of concerns over Iran, could take GBP NZD back up towards last Tuesday’s 2-month high of 1.9491.
Summary of major upcoming data releases that we think may move the market.
- The GBP CAD exchange rate showed signs of a revival over the past seven days
- Pound Sterling to New Zealand Dollar Foreign Currency Exchange Rate Forecast – Kiwi stabilises as stock markets rebound…
- Pound Sterling to New Zealand Dollar Foreign Currency Exchange Rate Forecast – Sterling give back recent gains
- Pound Sterling to New Zealand Dollar Foreign Currency Exchange Rate Forecast
- The past seven days have seen Sterling buck its recent run of losses against the Australian Dollar