GBP/NZD Exchange Rate Steady after Disappointing UK PMI Data
UPDATE: The Pound Sterling New Zealand Dollar (GBP/NZD) exchange rate has seen no major movement today following the release of UK manufacturing data.
July’s manufacturing PMI has shown a greater-than-expected slowdown in economic activity, which has rattled GBP traders.
The Pound has been trading at a level of NZ$1.92 on the interbank rate, which is below the current weekly GBP/NZD high of NZ$1.93.
GBP/NZD Exchange Rate Supported by US Dollar Appreciation
UPDATE: The Pound Sterling New Zealand Dollar (GBP/NZD) exchange rate is trading at a rate of NZ$1.92 today, echoing earlier movement.
This supportive level of GBP/NZD trading has been enabled by the latest US Dollar advance, which has lowered demand for the New Zealand Dollar.
Recent US income data has supported the US Dollar, revealing 0.4% growth in levels of personal earnings and spending.
Dip in UK Consumer Confidence Fails to Prevent GBP/NZD Exchange Rate Rise
The Pound (GBP) has risen by 0.3% against the New Zealand Dollar (NZD) today, primarily on low demand for the latter.
This Pound Sterling advance has put the GBP/NZD exchange rate at a level of NZ$1.92 at the interbank rate, which is below last week’s highs of NZ$1.93.
The latest UK economic news has been disappointing, coming in the form of a GfK measure of consumer confidence in July.
This has declined from -9 points to -10, indicating growing pessimism among consumers.
As mentioned above, today’s GBP/NZD exchange rate rise is primarily because the New Zealand Dollar is the weaker currency; the GfK data has been distinctly unsupportive.
New Zealand Dollar to Pound (NZD/GBP) Exchange Rate Drops along with NZ Business Confidence
A decline in NZ business confidence levels has dragged the New Zealand Dollar (NZD) down against the Pound (GBP) today.
July’s ANZ business confidence reading showed a decline from -39 points to -44.9, missing expectations for an improvement to -37.7 points.
This is reportedly the lowest level of business optimism in the country since May 2008 and shows that 45% of respondents were pessimistic about current conditions.
The coalition government which took over in 2017 is largely blamed for this drop in business optimism, and the latest confidence shock shows that the situation is far from improving.
GBP/NZD Forecast: Greater Pound to New Zealand Dollar Gains ahead on NZ Jobs Data?
This week, Pound Sterling/New Zealand Dollar (GBP/NZD) exchange rate movement may be caused by NZ jobs market data out this evening, followed by UK PMI and interest rate news.
Taking these in order, this evening’s New Zealand data will consist of Q2’s jobs market stats, the most important of which are employment change and unemployment rate readings.
Compared to Q1’s 0.6% rise in employment, a smaller 0.4% reading is predicted for Q2.
With that in mind, the New Zealand Dollar might drop against the Pound if the Q2 unemployment rate rises from 4.4% to 4.5% as some analysts predict.
New Zealand’s government has been trying to make managing employment part of the Reserve Bank of New Zealand’s (RBNZ) mandate, so this news could unsettle NZD traders.
If it looks like the jobless rate is rising then the RBNZ may eventually loosen monetary policy to make conditions more favourable for employers.
Getting back to the Pound, UK PMI data will be out over Wednesday to Friday, but the main event is Thursday’s midday Bank of England (BoE) interest rate decision.
The UK central bank may take the plunge and hike interest rates from 0.5% to 0.75%; such a decision would likely trigger a rapid Pound to New Zealand Dollar exchange rate rise.
Beyond this, GBP trader optimism might drop back on Friday if July’s UK services PMI reveals a slowdown in sector growth.