GBP/NZD Exchange Rate Trending Higher, Forecast to Retain Strength after RBNZ Currency Sales
Despite a reasonably volatile market on Tuesday (thanks to an overbought US Dollar), the Pound to ‘Kiwi’ (NZD) exchange rate is holding relatively steadily in a high position. Speculation that the Reserve Bank of New Zealand will continue to sell their currency has kept the ‘Kiwi’ low. A revision to British GDP data has bolstered Sterling.
If you're looking to make an international money transfer, we recommend TorFX.
The Pound Sterling to New Zealand Dollar exchange rate is currently trending in the region of 2.0878.
When the London session opened on Monday morning Sterling was in a strong position. This was as a result of Bank of England Governor Mark Carney who gave a hawkish speech on Thursday. Carney suggested that the majority of the conditions to normalise monetary policy have now been met, and a rate increase is on the cards in the near-future.
Monday’s British economic data, however, softened Sterling after printing lower-than-expected. The BoE Consumer Credit declined from £1.108 billion to £0.898 billion, Mortgage Lending dropped from £2.34 billion to £2.28 billion and Mortgage Approvals cooled from 66, 100 to 64, 210 despite the median market forecast of an increase to 69, 000.
A solitary New Zealand domestic data publication on Monday printed relatively positively. Building Permits met with the market consensus of stagnation following a decline of -1.7% the previous month. However, this was not enough to overshadow the huge declination from the biggest currency sale by the Reserve Bank of New Zealand since 2007.
The Pound Sterling to New Zealand Dollar exchange rate has hit a low today of 2.0777.
Sterling has enjoyed a boost against many of its most traded currency rivals despite waning consumer confidence. The GfK Consumer Confidence Survey was expected to drop from 1 to 0, but the actual result showed a contraction to -1. The Pound was able to improve, however, after a revision to the second quarter Gross Domestic Product, which was changed from 0.8% to 0.9%.
New Zealand’s data on Tuesday has been relatively inconsequential. Activity Outlook rose from 36.6 to 37.0, but Business Confidence declined from 24.4 to 13.4.
Given that Tuesday’s New Zealand data is inconsequential in terms of provoking movement, the reason for the continued low ‘Kiwi’ value is most likely to be speculation of yet more currency sales from the RBNZ. ‘The important information in today’s release is the confirmation that the RBNZ is willing to intervene at times when the New Zealand Dollar is seen as unjustified and when market conditions are ripe for a successful intervention,’ said Dominick Stephens, chief New Zealand economist at Westpac Banking Corp. in Auckland. ‘In that light, we wouldn’t be surprised to see further selling over following months’.
Forecast for the Pound to New Zealand Dollar Exchange Rate
An absence of New Zealand economic data on Wednesday is likely to see the GBP/NZD exchange rate hold in a high position. Any changes will be dictated by a solitary UK domestic data publication. The Manufacturing PMI is expected to rise from 52.5 to 52.7.
The Pound Sterling to New Zealand Dollar exchange rate has reached a high today of 2.0958.
The Pound to New Zealand Dollar exchange rate extended gains by a further 0.4% on Wednesday as the ‘Kiwi’ remained out of favour and the Pound was supported by an upward revision to UK second quarter GDP.
Although China’s Manufacturing PMI held at 51.1 in September, instead of being revised down to 51, the commodity-driven New Zealand Dollar failed to benefit.
If today’s UK manufacturing PMI prints above expected levels, the GBP/NZD exchange rate could continue advancing in the hours ahead.