Drop in UK Earnings could Shatter Pound to New Zealand Dollar Rate Today
With UK inflation rates rising in January and talks of inflationary pressures growing, the Pound New Zealand Dollar exchange rate could be in for a nasty shock when this evening’s earnings figures come out.
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Sterling previously slumped when it emerged that inflation had risen to 1.8% annually in January, rather than 1.9%, as this figure remains further below the Bank of England (BoE) target of 2% than markets were expecting.
PricewaterhouseCoopers Senior Economic Advisor Andrew Sentence responded;
‘The trend is clearly towards higher inflation, however, and we should expect the rate of price increases to rise above the 2% Bank of England target in the next few months. By the end of this year, inflation is likely to be around 3% and possibly even higher. Rising energy prices and the weakness of the Pound are the main factors behind this expected increase’.
With UK inflation now rising, added pressure has been heaped on the incoming UK average earnings figures for December.
These are currently expected to show no change in wage growth; an against-forecast drop could easily send the Pound into a negative slump against the New Zealand Dollar due to signs that UK consumers will be in for a rough ride in the coming months.
Despite this handicap, the Pound could still gain ground against the New Zealand Dollar due to an NZ data shortage; the biggest news of the week will be the Business NZ PMI for January, which isn’t expected until Friday morning.
Outside of these direct pieces of national data, the NZD could also be swayed be developments in the US; NZD could weaken if market confidence returns over the Trump administration.
Recent GBP NZD Interbank Exchange Rates
At the time of writing, the Pound New Zealand Dollar (GBP NZD) exchange rate was trending in the region of 1.73 and the New Zealand Dollar Pound (NZD GBP) exchange rate was trending in the region of 0.57.