Pound to New Zealand Dollar (GBP/NZD) Exchange Rate Fluctuations Forecast ahead of CPI Data
The British Pound is currently trading up at 1.9416 against the New Zealand Dollar, in what will prove to be an interesting week for the GBP/NZD exchange rate.
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Both Sterling and the New Zealand Dollar have been bullish members of the currency market in recent weeks, and currently economists are forecasting both currencies to surge.
The strong Pound has caused speculation amongst business leaders that company profits will fall significantly despite their sales soaring, with the current exchange rate residing so high.
Companies such as Burberry, SuperGroup (owners of Superdry), and AB Foods (owners of Primark), have all speculated that despite positive sales statistics, they could potentially lose up to £55m in profits this year.
SuperGroup chief executive, Julian Dunkerton, commented: ‘With a strong pipeline of new stores, particularly in mainland Europe, we are well positioned for further profitable growth in the year ahead. The strength of the Superdry brand and the investment we have made in our business leaves me confident in our ability to implement and deliver the growth strategy.’
New Zealand Dollar to US Dollar exchange rate higher
Meanwhile the ‘Kiwi’ is trading higher against the US Dollar as the US awaits Janet Yellen’s Federal Reserve speech on Tuesday.
With speculation prominent on the time span of the US interest rate hikes, the ‘Buck’ is trading lower as economists speculate that the statement will prolong the current low interest rates.
A currency expert for Bancorp Treasury Services, Peter Cavanaugh, has stated: ‘If Yellen comes out with a comment that implies the first Fed funds rate hike might not be until the second half of next year, we’ll probably see US Dollar weakness and in the hunt for yield, the “Kiwi” may try at that high. There’s a hunger for the yield because there’s so much free cash lying around in the world.’
Furthermore with the ‘Kiwi’ proving popular against other currency majors, the possibility of another interest rate hike for New Zealand seems likely again.
An expert in foreign exchange, Imre Speizer commented: ‘The question is whether he’s [Graeme Wheeler, governor for the Reserve Bank of New Zealand] going to pause for one meeting or two – the data has been a bit negative compared to Reserve Bank’s forecasts, so it’s more of a likelihood for two meetings.’
Pound to New Zealand Dollar fluctuations forecast
The GBP/NZD pairing should see an interesting week of fluctuations with influential UK data releases coming to the forefront this week.
Tuesday will prove a data-heavy day for the UK with the Consumer Price index released alongside the Producer Price Index and the Core Consumer Price Index.
Furthermore at 22:45 GMT on Tuesday, the New Zealand Consumer Price Index will also be published, which is currently forecast to rise from 1.5% to 1.8%.
The UK Consumer Price Index is also predicted to rise, but by a slightly smaller margin, from the previous 1.5% to 1.6%.
Both currencies are at present trading up against the US Dollar; the British Pound is currently trading at 1.7126, whilst the ‘Kiwi’ is currently trending in the region of 0.8816 against the ‘Buck’.