British Pound to New Zealand Dollar (GBP/NZD) Exchange Rate Plummets, USD/NZD Dims
The Pound to New Zealand Dollar (GBP/NZD) exchange rate jumped by over 0.6% in response to the news that New Zealand’s economic outlook was positively revised.
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The New Zealand Dollar broadly strengthened after Fitch (one of the world’s top three credit rating agencies) upwardly adjusted its credit outlook for the South Pacific nation from stable to positive.
As well as reaffirming New Zealand’s foreign currency rating at AA, the institution asserted; ‘Fiscal consolidation is strengthening the resilience of New Zealand’s sovereign credit profile. The authorities have a credible plan to lift the fiscal surplus in the years ahead. […] The macroeconomic record and prospects are supportive. New Zealand’s economic policy framework, business environment and standards of governance rank among the world’s strongest from a credit perspective and warrant high-grade sovereign ratings.’
This revision also justifies the Reserve Bank of New Zealand’s decision to continue with its policy of steadily raising interest rates.
The Pound to New Zealand Dollar (GBP/NZD) exchange rate hit a low of 1.9406 before a correction trimmed Sterling’s daily loss to 0.43% and helped the British asset consolidate its position around the 1.9495 level.
The USD/NZD exchange rate is currently trading in the region of 1.1388 having moved between a high of 1.1447 and a low of 1.1357.
Today’s US Consumer Credit and JOLTs jobs opening data could put the pairing under further pressure if they don’t print positively.
Losses in the Pound were also the result of the UK’s uninspiring Industrial Production and Manufacturing Production figures.
The UK report saw senior economic advisor Martin Beck assert; ‘[BoE Policymakers] may have hit a hurdle. Weaker demand from overseas, as well as the headwinds presented by the strength of Sterling in recent months, are likely to have contributed to the poor performance of the sector. However, the latest figures should not be a serious cause for concern. On an annual basis, industrial production continued to grow at a solid clip, as did output from the manufacturing sector. Today’s numbers do not change our expectations of GDP growth of 1% in the second quarter.’
British Pound to New Zealand Dollar (GBP/NZD) exchange rate movement could occur later today as the UK’s June growth estimate is published.