GBP/NZD Exchange Rate Sinks despite Poor NZ Global Dairy Trade Figures
Update: The Pound has fallen by nearly 0.6% against the New Zealand Dollar despite the publication of the NZ Global Dairy Trade Price Index, which fell by -3.8% against its previous -3.4%.
Sterling, however, has continued to sink ahead of tonight’s second ballot on the Tory leadership role, with Boris Johnson still perceived as the favourite to win.
Fears are mounting that Johnson will force the UK into a hard-Brexit, and this is leaving many Sterling traders skittish.
Conservative MP, Antoinette Sandbach, has remained critical of Johnson, saying:
‘Boris Johnson is a very Marmite politician, certainly in Europe. I think he’ll find it incredibly difficult to get the kind of variation to the deal that he’s claiming he will get. I think it’s another unicorn being promised.’
Pound New Zealand Dollar (GBP/NZD) Exchange Rate Slips as ‘Kiwi’ Traders Hopeful on NZ Growth
The Pound New Zealand Dollar (GBP/NZD) exchange rate has fallen today and is currently trading around NZ$1.9251.
The New Zealand Dollar (NZD) benefited from New Zealand’s largest rise in meat and dairy manufacturing in five years, following an increase of 2% in March this year.
Sue Chapman, Manufacturing Statistics Manager at Stats NZ, commented:
‘The volume of meat and dairy products manufacturing sales had the highest percentage rise since the December 2013 quarter.’
NZD is also rising ahead of tomorrow’s GDP figures for the first-quarter, which are expected to remain steady at 0.6%.
Nick Tuffley, Chief Economist at ASB Bank, commented:
‘[S]unny and relatively calm weather conditions over summer appear to have been beneficial for the construction industry, with the building work put in place survey revealing construction activity boomed over the quarter.’
New Zealand Dollar (NZD) exchange rates, however, are being held back by ongoing US-China tensions, as US investment in China slows amid fears of a global recession. With China being New Zealand’s closest trading partner, this has left some NZD traders feeling cautious.
GBP/NZD Exchange Rate Falls as Conservative Leadership Race Remains in Focus
Pound Sterling (GBP) exchange rate traders have been focusing on political developments today with no notable economic data releases due for release until tomorrow.
Boris Johnson, the former Foreign Secretary, has received increasing support as the new leader of the Conservative Party following backing from Andrea Leadsom – one of his former rivals in the race.
Commenting on who she thinks would make the best leader to deal with Brexit, Leadsom said:
‘I think he is the best placed to get us out of the EU at the end of October. His view and mine are closely aligned … He is someone who can bring the country and the party back together and take us forward in a positive way.’
Boris Johnson is perceived as the most likely candidate to succeed in tonight’s second leadership ballot.
Sterling traders will be awaiting a speech by Mark Carney, the Governor of the Bank of England.
If Carney makes any dovish comments about the UK economy we could see the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate fall further.
Pound New Zealand Dollar (GBP/NZD) Exchange Rate Outlook: Pound to Remain Subdued as Brexit News Takes Backseat
Pound Sterling (GBP) exchange rate traders will be looking ahead to tomorrow’s slew of economic data, with the UK Consumer Price Index (CPI) figures for May the main focus, with the figure expected to fall.
UK Retail Price Index (RPI) figures for May are also expected to slip, likely weakening market confidence in GBP.
New Zealand Dollar (NZD) investors, meanwhile, will be focusing on the NZ GDP figures for the first-quarter.
Consensus is that they will remain unchanged at 0.6%, likely providing some further uplift for the NZD/GBP exchange rate.
The Pound to New Zealand (GBP/NZD) exchange rate will most likely be driven by political developments, and with the Conservative Party leadership race eclipsing Brexit, Sterling is likely to remain subdued.