New Zealand Dollar (NZD) Exchange Rate Holds Gain against Sterling, Stumbles against US Dollar
The New Zealand Dollar (NZD) exchange rate held its 0.4% advance against the Pound during a quiet Australasian trading session.
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Against the US Dollar (USD) the New Zealand Dollar was still slightly softer as mounting tensions in Ukraine drove investors towards safe haven assets.
A decided lack of economic reports from New Zealand did temper movement in the ‘Kiwi’ overnight but demand for the commodity-driven currency was limited as news broke of Russian rebels acting in defiance of the ceasefire and gunning down a government helicopter in Ukraine.
The Ukrainian President was quick to announce that his troops would take immediate action if any similar actions occurred.
Commodity-driven and higher-risk currencies like the New Zealand Dollar (NZD) and Australian Dollar (AUD) declined as a consequence.
However, the US Dollar came under pressure of its own on Wednesday after William Dudley, President of the Reserve Bank of New York, asserted that he wouldn’t bank on the Fed increasing interest rates in the middle part of next year.
Dudley was recently quoted as saying; ‘The market expectations are that the Federal Reserve will start to raise short-term interest rates around the middle of 2015. That sounds to me like a reasonable forecast, but forecasts often go astray, so I wouldn’t put too much weight on that particular set of forecasts […] The world is highly uncertain.’
Dudley also stressed that at the present time, maintaining an accommodative fiscal policy remains ‘very, very appropriate’.
The strength in the New Zealand Dollar to Pound (NZD/GBP) pairing continued as the Confederation of British Industry’s Reported Sales gauge unexpectedly declined, plummeting to +4 from +16 and further dampening rate hike expectations.
This report follows one published earlier in the month showing a 0.5% month-on-month decline in UK retail sales.
The New Zealand Dollar to US Dollar exchange rate (NZD/USD) could come under fire later today if the US GDP, Durable Goods and Consumer Consumption figures trump estimates.
The US reports released so far this week, including the nation’s Manufacturing PMI and Consumer Confidence measure, have all come in above expected levels.
Investors with an interest in the New Zealand Dollar will also be looking ahead to the tomorrow’s domestic trade data.
The report is expected to detail that the value of exports held at 4.50 billion New Zealand Dollars in May while the level of imports increased from 3.96 billion New Zealand Dollars to 4.23 billion New Zealand Dollars.
The New Zealand Dollar is currently trading against the British Pound in the region of 0.5123 and is trading against the US Dollar in the region of 0.8698.