With economic data for both the UK and New Zealand Dollar lacking at the start of this week, the Pound was able to edge slightly higher against its South Pacific peer as investors speculated on the likely outcome of the upcoming Reserve Bank of New Zealand (RBNZ) interest rate decision.
The Pound reached a peak of 2.1239 against the ‘Kiwi’ last week, but ended at low of 2.0851.
Poor PMI Outcomes Seal Sterling’s Fate
The appeal of the Pound was hindered last week by consistent negativity from the nation’s PMIs, which delivered a volley of negativity from Tuesday to Thursday. Although the manufacturing, construction, composite and services PMIs remained above the 50 mark separating growth from contraction, the notable declines registered in all areas did little to encourage Pound investors.
UK’s Stability In Doubt after Prominent Resignations
The Pound has experiencing limited demand today thanks to a shortage of data and two concerning headlines relating to two high-profile resignations connected with different parts of the UK’s economic infrastructure. The first was British Chambers of Commerce Director General John Longworth, who stepped down after supporting a ‘Brexit’ last week.
The other resignation was that of EDF Finance Director Thomas Piquemal, who left his post over concerns that development at the Hinkley Point power station is unsustainable.
New Zealand Dollar Movement Limited ahead of RBNZ Decision
The New Zealand Dollar was largely trending in a narrow range against its major peers last week, with a trio of disappointing domestic releases on Sunday starting the ‘Kiwi’ on a low note. With the exception of rising dairy auction prices, most economic announcements were lacklustre in their impact and failed to generate an NZD rally.
Today, the ‘Kiwi’ has fallen against the competition amid investor uncertainty regarding the impending Reserve Bank of New Zealand (RBNZ) interest rate decision. A rate cut from the central bank at this juncture could send NZD trending lower.
This Week’s GBP/NZD Exchange Rate Forecast
Developments in New Zealand are likely to be the main cause of GBP/NZD movement this week.
Tuesday night will bring New Zealand’s card spending stats for February, while the morning and afternoon of Wednesday will see the UK’s production and GDP stats announced. The most notable event will be Wednesday night’s RBNZ interest rate decision, along with a speech from Governor Graeme Wheeler on the central bank’s current view of fiscal policy.
Heads Up
Summary of major upcoming data releases that we think may move the market.