Pound Sterling New Zealand Dollar (GBP/NZD) Exchange Rate Muted on Mixed Chinese Data
The Pound Sterling New Zealand Dollar (GBP/NZD) exchange rate remained flat on Friday morning. This left the pairing trading at around NZ$2.0364.
The New Zealand Dollar remained under pressure following the release of mixed economic data from China.
While China’s industrial production data was better than expected, rising by an annual rate of 3.9%, retail sales disappointed.
Year-on-year, Chinese retail sales slumped by -7.5%, weighing on market sentiment and leaving the ‘Kiwi’ under pressure.
Commenting on this, Stephen Innes, chief global markets strategist at AxiCorp said:
‘It’s easier getting factories going than getting consumers up and running. But consumer consumption beyond China needs to pick up in full tilt. Otherwise, the nascent recovery in industrial output will also start tapering off.’
Added to this, US President Donald Trump escalated trade tensions with China. Overnight, the President of the United States said the country could cut all ties with China over the coronavirus pandemic.
While this did not spark huge market movement, analysts expect markets are used to Trump’s rhetoric. Commenting on this, dealer at Kiwibank, Mike Shirley said:
‘I don’t know whether it’s because the world’s got other things to concentrate on, like Covid-19, or maybe the world’s got used to the rhetoric.’
Pound (GBP) Under Pressure as it’s a ‘Long Road Back to Normal’
Sterling remained under pressure after a survey revealed that British manufacturers aren’t as confident about a quick return to work.
The survey revealed manufacturers believe it will take longer to recover from the impact of coronavirus than just a few weeks ago.
Around three-quarters think business will not be back to normal within six months while 36% believe it will take more than a year.
Commenting on this, Stephen Phipson, Make UK’s chief executive noted:
‘It’s clear that it is going to be a long road back to anything like normal trading conditions and, despite the lockdown beginning to be lifted, there will be a significant impact on companies and jobs for some time to come.’
Meanwhile, the Pound continued to be held down by a combination of weak data due to the coronavirus and Brexit risks.
Pound New Zealand Dollar Outlook: PMI and Unemployment Data in Focus Next Week
Looking ahead, the New Zealand Dollar (NZD) could suffer losses at the start of next week’s session after the release of April’s PMI data.
If New Zealand’s services PMI plummets in April due to the coronavirus pandemic, it will leave the ‘Kiwi’ under pressure.
Meanwhile, Tuesday could see Sterling suffer some losses following the release of March’s unemployment statistics.
If data reveals that the country’s unemployment rate has increased more than expected due to the coronavirus crisis, the Pound New Zealand Dollar (GBP/NZD) will remain flat.