New Zealand Dollar (NZD) Weakens against Pound (GBP) on Upbeat UK Economic Forecast
After closing out last week in a stronger position, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate has been left fluctuating around the day’s opening levels ahead of this week’s New Zealand inflation data.
Pound (GBP) Exchange Rates Advance after Brexit Growth Forecast
Pound Sterling (GBP) exchange rates have appreciated today following statements from Lord Jim O’Neill, a former Treasury minister, during an interview with the BBC.
Lord O’Neill said the UK economy could experience such strong growth it will ’dwarf’ any losses caused by Brexit uncertainties.
As O’Neill supported the ‘Remain’ campaign during the EU referendum, this has been seen as a strong endorsement of the UK’s economic future post-Brexit. His comments have been well-received by Sterling investors.
New Zealand Dollar (NZD) Benefits from US Government Shutdown
The Pound to New Zealand Dollar (GBP/NZD) exchange rate has remained around opening levels today, with NZD supported by developments in the US.
The US is currently in the grip of a government shutdown, which means that a number of key agencies across the country are closed or operating minimally. Concerns about the impact this could have on the US economy have weakened the US Dollar and lent support to higher-yielding currencies like the New Zealand Dollar.
GBP/NZD Forecast: New Zealand Inflation Stats in Focus
Over the week ahead, Pound to New Zealand Dollar (GBP/NZD) exchange rate movement is likely to occur in reaction to on Wednesday’s UK earnings and unemployment figures, and Friday’s GDP figures.
Economists currently forecast no change in the pace of UK wage growth, or in the current 4.3 % rate of unemployment.
Last week’s consumer price index revealed a drop in inflation, so steady wage growth would narrow the gap between earnings and price pressures, boosting the UK’s economic outlook. On the other hand, UK GDP estimates are expected to show a slowdown from 1.7% to 1.4% in the fourth quarter, which could mean the GBP/NZD losses before the weekend.
New Zealand’s inflation figures will also be in focus this week.
Inflation is believed to have slowed from 0.5% to 0.4% in the fourth quarter, quarter-on-quarter.
As easing consumer price pressures could weigh on the odds of the Reserve Bank of New Zealand (RBNZ) making any adjustments to interest rates in the near future, a dip in inflation may leave the New Zealand Dollar weaker.
Other New Zealand data to be aware of includes the nation’s performance of services index and credit card spending report.