Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate Climbs on Rate Hike Bets
Bank of England rate hawks were dealt a heavy blow after British inflation data and global economic stagnation tempered bets regarding the timing of monetary policy normalisation. However, on Thursday renewed hope has been fuelled by hawkish Bank of England policymaker Martin Weale following a speech he gave in Hull. Meanwhile, the New Zealand Dollar is generally trending lower as a result of further declination in the commodities market.
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The Pound Sterling to New Zealand Dollar exchange rate is currently trending in the region of 2.0241.
On Wednesday the Pound managed to rebound from a bearish run after British labour market data printed impressively. An uptick in average weekly earnings and a positive decline in unemployment have added pressure on the BoE to tighten monetary policy.
Over the course of Wednesday the New Zealand Dollar was smothered by the mixture of commodity price cuts, geopolitical tensions and trader risk aversion strategies. However, the ‘Kiwi’ (NZD) recovered a fraction of the losses late on Wednesday evening after the Business NZ Performance of Manufacturing Index increased from 57.0 to 58.1.
The Pound Sterling to New Zealand Dollar exchange rate has fallen to a low today of 1.9985.
Thursday has seen Sterling appreciate against nearly all of its major peers in the aftermath of a hawkish speech given by BoE policymaker Martin Weale. With unemployment having improved considerably, Weale argues that in anticipation of inflationary pressure they should increase the benchmark interest rate.
‘The tightening of the labour market means that, instead of waiting to see wage growth pick up, I think it is appropriate to anticipate that wage growth,’ he said. ‘The margin of spare capacity is shrinking rapidly and all logic suggests that ought to lead to an increase in inflationary pressures over the two to three-year horizon which concerns the Committee.’
The New Zealand Dollar has depreciated on Thursday as a result of continued declination in the commodities market. ‘Commodities sank to a five-year low as energy prices extended losses on rising supplies and US economic data that missed estimates added to concern that global growth may be faltering, hurting the outlook for raw materials,’ stated Laura Clarke, a reporter for Bloomberg.
Forecast for the Pound to New Zealand Dollar Exchange Rate
With an absence of economic data to curb GBP/NZD gains it is highly likely that the Pound will continue to bully the New Zealand Dollar. With so many separate issues driving cautious trading it’s hard to see the antipodean currency making a significant recovery.