Pound To New Zealand Dollar: Encouraging Chinese Data Boosts NZD Exchange Rates

Published: 20 Oct 2017 21:24 Currency Markets

British pound to new zealand dollar exchange rate forecast

Despite weaker risk appetite the New Zealand dollar exchange rate complex made fresh gains against the British pound on Wednesday afternoon, benefiting from worries in the run-up to the latest Bank of England rate decision.

In spite of a weaker REINZ House Sales figure the New Zealand dollar exchange rates strengthened ahead of the weekend, with the appeal of risk-sensitive currencies boosted by encouraging Chinese data.

Demand for the Pound, meanwhile, weakened thanks to disappointing UK Construction Output figures and dovish commentary from Bank of England (BoE) policymaker Andy Haldane.

GBP to NZD exchange rate chart

Latest Pound/New Zealand Dollar Exchange Rates

On Thursday the Pound to British Pound exchange rate (GBP/GBP) converts at 1

At time of writing the pound to pound exchange rate is quoted at 1.

The pound conversion rate (against us dollar) is quoted at 1.264 USD/GBP.

At time of writing the pound to australian dollar exchange rate is quoted at 1.937.

Please note: the FX rates above, updated 28th Mar 2024, will have a commission applied by your typical high street bank. Currency brokers specialise in these type of foreign currency transactions and can save you up to 5% on international payments compared to the banks.

Thursday's session on the forex markets saw the Pound sterling (GBP) powered ahead against the New Zealand Dollar (GBP) today, rising by a staggering 2.95%.

The gains stem from the fact that instead of cutting as expected, the Bank of England (BoE) left the UK interest rate untouched.

The GBP/NZD exchange rate’s gains have steadied recently, but Sterling remains at an around 2.5% advantage against the flagging NZD.

With the mood towards the sterling bolstered by new Chancellor of the Exchequer Phillip Hammond ruling out an emergency budget investors were in a generally positive mood ahead of the BoE policy decision.

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Consequently the Pound strengthened substantially when it was ultimately revealed that the BoE had voted against lowering interest rates, with the GBP/NZD exchange rate extending its gains to 2.70% on the opening.

The British Pound (GBP) has been on generally bullish form against the New Zealand Dollar (NZD) since the start of the week, with FX investors encouraged by the speedy end to the Conservative leadership contest.

Although Theresa May has previously indicated a desire not to invoke Article 50 before the end of the year this was not enough of a deterrent to dent the uptrend of the Pound.

Investors also failed to take any particular note of an uptick in New Zealand Food Prices, allowing the Pound Sterling to New Zealand Dollar (GBP NZD) exchange rate to extend its gains further overnight.

British Pound (GBP) Exchange Rates Plunge as Markets Price-in Tomorrow's UK Interest Rate Decision

Confidence in the British pound began to flag on Wednesday, however, with the minds of markets turning back towards the first post-Brexit Bank of England (BoE) policy meeting.

Investors largely anticipate that the BoE will opt to cut interest rates to a fresh record low, with the door likely to be left open for further action in the future as Paul Robson, Research Analyst at RBS, noted:
‘The MPC might prefer to wait for the detailed August forecast round before sanctioning lower rates, but it is not obvious that there would be significantly more information by that point (a scattering of post-referendum surveys). The BoE was more aggressive and decisive during the financial crisis of 2008-09. That episode probably provides the playbook for the reaction function this time.’

If the BoE ultimately doesn’t follow through and slash rates, however, the Pound could see a strong resurgence on Thursday, as a lack of easing would seem to signal greater confidence in the robustness of the domestic economy.

NZD to GBP exchange rate chart

Sharp Slump in Chinese Exports Failed to Boost GBP/NZD Exchange Rate

The mood towards the New Zealand Dollar soured somewhat on Wednesday morning in response to some discouraging Chinese data.

As Chinese imports slumped severely by -8.4% on the year in June markets were prompted to return to a risk-off mentality, with concerns mounting over the outlook of the world’s second largest economy.

With commodity prices consequently under pressure once again there was little reason for investors to buy into the ‘Kiwi’, particularly as expectations are for a weakening in tonight’s New Zealand Manufacturing PMI.

Chinese GDP and US Inflation to Drive New Zealand Dollar (NZD) Exchange Rates

Further volatility should be expected for the New Zealand Dollar on Friday’s raft of high-impact Chinese and US data, with market sentiment likely to remain the primary driving force behind the GBP/NZD exchange rate ahead of the weekend.

If China’s growth is found to have slowed in the second quarter then the ‘Kiwi’ is likely to be weighed down by rising investor anxiety, with safe-havens such as the US Dollar (USD) expected to benefit from such an outcome.

Softer US data, on the other hand, would bolster demand for the antipodean currency, with any weakness in inflationary pressure diminishing the odds of a 2016 Federal Reserve interest rate hike further.

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