British Pound (GBP) Exchange Rate Declines against NZD and ZAR on Oil Price Drop
As global crude oil prices continue to plummet, the Pound has generally trended lower against the majority of its most traded currency competitors. Meanwhile, the South African Rand has appreciated on rising gold prices and the New Zealand Dollar has advanced on Chinese data.
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The Pound Sterling to New Zealand Dollar exchange rate is currently trending in the region of 2.0423.
The Pound Sterling to South African Rand exchange rate is currently trending in the region of 17.7360.
Over the past few weeks the price of crude oil has fluctuated somewhat. On Friday it declined to a near 4-year low after Saudi Arabia opted to cut the price considerably. Sterling immediately plummeted against its major peers as a result of the price cut, and has trended lower since.
A report from the International Monetary Fund caused traders to seek safe-haven assets which, in turn, saw high-yielding currencies fall by the wayside. The New Zealand Dollar is one of those currencies that suffered as a result of the report.
The IMF report suggested that global economic growth has slowed considerably and may never recover. It also argues that the sustained period of low interest rates has only encouraged risk taking on global markets.
The Pound Sterling to New Zealand Dollar exchange rate has fallen to a low today of 2.0370.
The Pound Sterling to South African and exchange rate has dropped to a low today of 17.6820.
On Monday crude oil prices showed further declination after Iraq followed Saudi Arabia in cutting prices. ‘OPEC is not ready to act and that’s making people continue to sell,’ said Michael Lynch, president of Strategic Energy & Economic Research in Winchester, Massachusetts. ‘Until we see some comments out of OPEC suggesting they are going to stabilize the price, I think the market will probably keep falling.’
Sterling has continued to trend lower on Monday as a result of the low oil prices. Also traders have tempered their bets on rate increases which has compounded Sterling losses.
The South African Rand has advanced on Monday after gold futures rose to a three-week high amid the US Dollar decline. ‘It’s all about the Dollar and interest rates, because gold is Dollar-denominated, no matter how you look at it,’ George Gero, a New-York based precious-metals strategist at RBC Capital Markets LLC, said in a telephone interview.
Monday’s Chinese data has seen the New Zealand Dollar hold against most of its rivals. Chinese imports advanced beyond the median market forecast of a rise from -2.4% to -2.0%, with the actual result reaching 7%. Additionally Chinese exports eclipsed the market consensus of an increase from 9.4% to 12.0%, with the actual data climbing to 15.3%.
Forecast for the Pound to New Zealand Dollar and South African Rand
Sterling movement will be dictated by inflation data on Tuesday. Given that the Bank of England has highlighted inflation as the primary obstacle holding back a bank rate increase, traders will be hoping that the consumer price index data moves towards the 2% target.
A solitary New Zealand domestic data publication, Non Resident Bond Holdings, is unlikely to influence ‘Kiwi’ (NZD) movement significantly. The New Zealand Dollar is most likely to decline if trader risk aversion strategies continue to drive the currency market.
A complete absence of South African data is likely to cause the Rand to depreciate on Tuesday. If bullion continues to rise, however, so will the South African Rand.