On Wednesday, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate opened in the region of NZ$ 1.9979 and closed down lower around NZ$ 1.9877.
This overall decline in the GBP/NZD exchange rate was caused by GBP trader uncertainty about the Brexit process.
European Commission President Jean-Claude Juncker was responsible for an initial Pound Sterling to New Zealand Dollar exchange rate rise, but later analysis of his remarks led to a loss of confidence among GBP traders.
The most positive statement made by Mr Juncker was:
‘The UK will never be an ordinary third country for us. The UK will always be a very close neighbour and partner in political, economic and security terms.’
Less supportively, however, Mr Juncker also warned that the UK would have to leave the EU single market after the Brexit process:
‘We ask the British government to understand that someone who leaves the [European] Union can not be in the same privileged position as a member state.
‘If you leave the union you are of course not part of our single market and certainly not only in parts of it.’
Wednesday’s only economic data from New Zealand was a low-impact measurement of food inflation – annual prices in August 2018 were reported to have fallen by -0.1% compared to 2017.
GBP/NZD Exchange Rate News: Pound Sterling Rises on US Dollar Decline
The Pound (GBP) has risen to a level of NZ$ 1.9914 against the New Zealand Dollar (NZD) today, primarily because of international news.
Following reports of lower-than-expected inflation in the US, the US Dollar has fallen in value which has driven up demand for the more stable Pound.
UK domestic data has consisted of September’s Bank of England (BoE) interest rate decision – BoE policymakers decided to leave interest rates on hold at 0.75%.
This was largely the expected outcome, but the fact that there were no apparent plans of a future rate hike limited GBP/NZD exchange rate gains.
New Zealand Dollar to Pound (NZD/GBP) Exchange Rate Drops after Survey Reveals Housing Concerns
The New Zealand Dollar’s (NZD) decline against the Pound (GBP) today has come after the release of an Ipsos survey and signs of trouble in the dairy sector.
In the former case, the latest survey from Ipsos has revealed that half of respondents are worried about housing in New Zealand.
The NZ housing market has been under high inflationary pressure over recent years due to foreign buyers outcompeting locals – it remains to be seen if a recently-enforced foreign-buyer ban will lead to an overall reduction in house prices.
Elsewhere, New Zealand’s nationally-important dairy industry has been rattled by the news that Fonterra, a largescale dairy co-operative, has posted an NZ$ -196m loss in the 2018 financial year.
Pound Sterling to New Zealand Dollar Forecast: Will GBP/NZD Exchange Rate Rise on Disappointing NZ PMI?
Looking ahead, there are two notable economic events which could influence the Pound to New Zealand Dollar exchange rate (GBP/NZD) before the weekend.
First up will be tonight’s Business NZ PMI for August; despite the name, this measures changes to manufacturing sector activity.
The upcoming PMI reading is predicted to show a minor slowdown in August, with a shift from 51.2 points to 51.
This will still leave the manufacturing sector showing growth, but would also be a step closer to the sub-50 point contraction range.
If NZD traders responded negatively to a forecast-matching slowdown then the New Zealand Dollar to Pound exchange rate (NZD/GBP) could decline.
There will be an additional chance for GBP/NZD exchange rate gains on Friday, when Bank of England (BoE) Governor Mark Carney gives a speech in Dublin.
Mr Carney is not explicitly scheduled to discuss monetary policy, but if he dips into the subject of interest rates (among other things) then there could be GBP volatility.
GBP traders will be scouring his comments for any hints of future policy plans – if it is assumed that an early 2019 interest rate hike is likely then the Pound could appreciate.
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TAGS: Pound New Zealand Dollar Forecasts