FX Forecast: Will the GBP/NZD Exchange Rate Hold its Decline?
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New Zealand Dollar Exchange Rate Today
Although the New Zealand Dollar has been pressured in recent weeks by falling dairy prices, Chinese growth concerns and the Reserve Bank of New Zealand putting its interest-rate hiking cycle on hold, the commodity-driven currency rose alongside its higher-risk peers overnight.
Assets like the New Zealand Dollar climbed across the board after the Federal Open Market Committee’s meeting minutes defied expectations for a hawkish revision to interest rate rhetoric.
Industry experts had been hoping that the FOMC would insinuate that the first increase in borrowing costs is approaching. However, policymakers actually expressed concerns regarding the easing of global growth, the impact of geopolitical tensions and the potential risks attached to a strong US Dollar.
In the minutes it was stated that; ‘Several participants added that slower economic growth in China or Japan or unanticipated events in the Middle East or Ukraine might pose a similar risk. At the same time, a couple of participants pointed out that the appreciation of the Dollar might also tend to slow the gradual increase in inflation towards the FOMC’s 2% goal.’
The GBP/NZD exchange rate hit a high of 2.0471.
After the minutes were published the US Dollar posted extensive declines against almost all of its rivals and higher risk currencies like the New Zealand and Australian Dollars broadly advanced.
The Pound, which has been feeling the heat thanks to a run of below-forecast UK reports and comments regarding the currency’s overvaluation, couldn’t stand up to the New Zealand Dollar and the GBP/NZD pairing slipped during the Australasian session.
The New Zealand Dollar was little affected as reports showed a drop in the level of domestic card spending in September.
Total card spending fell by -0.2% on a month-on-month basis following a positively revised increase of 0.4% in August.
Retail card spending slipped by -0.1%, undermining forecasts for an increase of 0.4%.
According to Westpac economist Felix Delbruck; ‘We had been expecting some moderation in activity from what seemed like an unsustainably strong pace of growth the previous two months. Over the past three months as a whole, core retail card spending is still up 0.9 per cent, a fairly similar pace to the June quarter’s 1.2 per cent.’
Pound Sterling to New Zealand Dollar Weekly Forecast
Given that the Bank of England is unlikely to make any alterations to fiscal policy at the present time, the central bank’s interest rate decision may not have much of an impact on the GBP/NZD exchange rate.
New Zealand’s REINZ Housing Price Index and House Sales report could influence ‘Kiwi’ movement overnight.
The direction taken by the Pound to New Zealand Dollar exchange rate before the weekend could be determined by the UK’s Trade Balance stats and Construction Output figures.
Of course, investors will also be focusing on the speeches to be given by the Bank of England’s Andrew Bailey and Andrew Grace in Washington.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trading in the region of 2.0398.