GBP/NZD Exchange Rate Rangebound as UK’s ‘Jobs Miracle’ Dims in July
The Pound New Zealand (GBP/NZD) exchange rate held steady at around NZ$1.919 today after July’s UK year-on-year average earnings rose by 4% – an 11-year high.
Sterling failed to gain against the New Zealand Dollar (NZD) despite July’s UK unemployment rate easing to a 45-year low.
Samuel Tombs, Chief UK Economist at Pantheon Macroeconomics, was downbeat in his assessment:
‘The renewed fall in the unemployment rate distracts from an otherwise troubling labour market report… Most surveys of employment intentions also have deteriorated over the summer and now point to negligible growth in employee numbers. Britain’s so-called “jobs miracle” is starting to lose its shine.’
The GBP/NZD exchange rate continues to be driven by Brexit developments today as the bill designed to block a no-deal Brexit passed into law last night.
No-deal fears persist, with Sterling traders cautious despite the new legislation as British Prime Minister Boris Johnson remains unyielding, saying he will attempt to negotiate a deal with the European Union but is still prepared to ‘leave without one’.
NZD/GBP Exchange Rate Flat as ‘Kiwi’ is Held Down by US-China Trade Uncertainty
The New Zealand Dollar (NZD) failed to gain against Sterling despite August’s NZ electronic card retail sales figure rising from 0% to 1.1%.
Sue Chapman, a Retail Statistics Manager commented:
‘Card spending in retail industries bounced back after a quiet period in the previous five months. Most retail industries saw increased spending in August.’
New Zealand’s largest trading partner, China, also benefited today as the New Zealand inflation figure for August rose above consensus to 2.8%, fuelling market optimism for the risk-sensitive ‘Kiwi’.
However, the ongoing US-China trade war continues to drag on the NZD/GBP exchange rate.
Jin Canrong, an International Relations professor at Renmin University of China, said:
‘It’s not a 100 per cent thing, and it’s possible that the negotiations will collapse. The option of getting 100 per cent doesn’t exist … my conclusion is that the US has to give up the final 20 per cent [of its demands].’
GBP/NZD Outlook: Could Sterling Sink if Boris Johnson Ignores Anti-No-Deal Legislation?
New Zealand Dollar investors are anticipating tomorrow’s NZ food price index for August with any sign of improvement likely to be beneficial to the ‘Kiwi’.
US-China trade developments will also remain in focus.
With no UK economic data tomorrow, the Pound is certain to be driven by Brexit developments.
If Boris Johnson continues to ignore legislation by refusing to request a deadline extension, we could see the GBP/NZD exchange rate begin to fall as no-deal uncertainties increase.