Foreign Currency Market Update – GBP / NZD Update
The past week has seen the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate fluctuate wildly, with gains made by Sterling during the previous week replaced by losses this week.
Last week, the Pound’s greatest support in the GBP/NZD exchange rate came on Wednesday when the UK Q3 GDP results were announced. Although these largely disappointed forecasts by declining from 0.5% to 0.4% on the quarter and falling from 2.3% to 2.1% on the year, the fact that these were relatively minor losses served only to encourage investors in an otherwise scarce data week. As a consequence, the Pound jumped up to 2.20189 against the New Zealand Dollar shortly after the news was announced.
Since then, however, Sterling has largely been in a slump against its antipodean rival. After Wednesday’s high point, the sheer shortage of impactful UK data took its toll and saw the Pound fall to 2.1820 on Christmas Day.
Since then, the Pound has been faring poorly against the ‘Kiwi’ (NZD), having slumped to 2.1621 in the pairing on an extremely sparse week of economic publications for both economies.
The price of milk has had a mixed effect on the overall value of the New Zealand Dollar of late, as while it has generally fluctuated around the region of $13.50 since mid-December, any major climbs or falls have still resulted in respective movements for the ‘Kiwi’.
The previous week was largely positive for the New Zealand Dollar, as it was supported by rising results for the nation’s November Exports and Imports as well as the Westpac Q4 Consumer Confidence, which increased from 106 to 110.7.
For the rest of this year and the beginning of the next, Pound Sterling/New Zealand Dollar exchange rate movement may occur as a result of the UK Nationwide Housing Prices for December, the Bank of England (BoE) Consumer Credit result for November, Mortgage Approvals for November, the Construction PMI for December and New Zealand’s NZIER Business Confidence score for the fourth quarter.
For the Housing Prices published on December 30th, forecasts have been positive in both instances with predictions of an annual advance from 3.7% to 3.8% and a rise from 0.1% to 0.4% for the monthly printing.
The BoE’s Consumer Credit is forecast to rise from a prior £1178m to £1254.3m on January 4th, while Mortgage Approvals have similarly been forecast with optimism to rise from 69.63k to 69.8k.
On January 5th, the Construction PMI has been more pessimistically predicted, with a deterioration from 55.3 points to 54.98 on the cards.
The first New Zealand data release of the New Year will be out on January 6th and covers the NZIER Business Confidence result for the 4th quarter. At the time of writing, no forecasts had been made, but the past printing was a -14% decline.
Heads Up
Summary of major upcoming data releases that we think may move the market.