Currency News

Daily Exchange Rate Forecasts & Currency News

NZ Dollar Exchange Rates Today - Pound to NZD Softens as Sterling Rallies on Financial Stability Report

June 25, 2014 - Written by David Woodsmith

The New Zealand Dollar (NZD) strengthened against the British Pound (GBP) on Thursday after the Bank of England released its Financial Stability Report report designed to safeguard Britain's recovery. Sterling surged against a basket of currencies soon after the report was published, with the pound to nz dollar rate dropping 0.25 pct over the trading day.

The Pound to New Zealand Dollar exchange rate is 0.25 per cent lower on the day at 1.93927 GBP/NZD. - 26/06/2014 20:30 GMT

Earlier in the week, after Mr Carney toned down his talk on the timing of an interest rate hike by the Bank of England the Pound tumbled against all of its major peers, including the Euro and US Dollar. His comments drew scorn from both investors and UK lawmakers alike.

Lawmakers at the governments Treasury Select Committee criticized Carney for his lack of clarity over when rates will be increased. Investors were annoyed as only a fortnight previously the BoE governor hinted that interest rates could be raised before the end of the year.

“Carney disappointed some of the hawkish expectations. It’s less a case of saying when they will hike and more about saying there’s more uncertainty about the timing than the market had been giving the BoE credit for,” said an economist at Nomura International Plc.

Carney’s mention of wage growth affecting the rate rise decision also disappointed investors as recent data releases have shown a lack of growth in wages.

“Developments on the wage front suggest to me that there has been more spare capacity in the labour market than we had thought,” Carney told lawmakers on Parliament’s Treasury Committee today. The exact timing of any increase in the BOE’s key rate “will be driven by the data,” he said.

NZ Dollar rate benefits over Bank of England expectations



Advertisement
The New Zealand Dollar (NZD) exchange rate benefited from the comments as investors turned to higher yielding currencies on expectations that the BoE will not raise rates sooner than expected. New Zealand’s Central Bank is on a run of rate hikes and the national economy is regarded as a safe place for funds. The higher yields offered by the RBNZ rates are an enticing target for investors.

Against other peers however the New Zealand Dollar softened as worries over the conflict in Iraq spooked economists. Violence in Iraq escalated into cross-border hostilities with Syria, fuelling investors' fears over the Middle East's stability.

With Israel launching attacks on Syria’s western border and Syria launching air strikes in Iraq’s western regions the situation has all the signs of a wider escalation.
ISIL militants are fighting the governments on both sides of the Iraq-Syria border, and an apparent decision by Syrian President Bashar al-Assad to intervene to help Mr Maliki further tangles the already complex knot of actors in the overlapping crises.

The USA’s 300 Special Forces advisors have arrived in the country but air strikes are unlikely as the US will not want to be seen as taking sides in what they see as a sectarian conflict.

The ‘Kiwi’ could give up some of its gains later in the session if today’s data out of the US comes in strongly.

Update 26/06/2014 - GBP weakens further against NZD today



The Pound weakened further against the New Zealand Dollar today after the South Pacific nation found solid support from last night’s disappointing data releases out of the United States.

The ‘Kiwi’ surged to an all time on its trade weighted index as a result. The currency could see some softening as investors start to think that Reserve Bank of New Zealand could decide to take action to send it lower.

Tonight, traders will be eyeing an inflation report in the US which is closely watched by the Federal Reserve.

The Pound meanwhile could soften if the financial stability report due to be published by the Bank of England adds to Tuesdays dovish stance regarding the UK economy.

Key New Zealand Dollar Exchange Rates - Updated 26/06/2014 20:30 GMT



The Pound Sterling to New Zealand Dollar exchange rate is trading down -0.25% at 1.93927 GBP/NZD.
The Euro to New Zealand Dollar exchange rate is trading down -0.6% at 1.55080 EUR/NZD.
The US Dollar to New Zealand Dollar exchange rate is trading down -0.49% at 1.13924 USD/NZD.
The Australian Dollar to New Zealand Dollar exchange rate is trading down -0.44% at 1.07181 AUD/NZD.
Like this piece? Please share with your friends and colleagues:

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.


TAGS: Currency Predictions Daily Currency Updates Poun Forecasts

Comments are currrently disabled