The Pound to New Zealand Dollar exchange rate has made solid gains following the UK unemployment rate unexpectedly falling to 4.8% yesterday and the higher-than-expected 1.5% rise in inflation.
Last Week: Sterling Bolstered by UK Lockdown Easing
The Pound was steadily rising against the New Zealand Dollar at the beginning of last week as markets were buoyed by Boris Johnsons’ announcement that the next stage of lockdown easing would go ahead in England.
Sterling then stumbled at the end of the week as concerns over the Indian variant of the coronavirus worried some investors that the third stage of England’s roadmap out of lockdown could be delayed, however a press conference from the government on Friday refuted those concerns.
At the same time, the risk-correlated New Zealand Dollar struggled from a resurgence in the US Dollar as a rise in US inflation worried markets and investors alike, limiting NZD exchange rates.
Three Things to Watch Out for This Week
- UK Inflation Rate Data
The release of the latest interest rate data from the UK this morning could push the Pound higher as inflation unexpectedly rose to 1.5% during April, over double March’s 0.7% reading.
- New Zealand Annual Budget
The New Zealand annual budget on Thursday could give an indication to how the country currently sees itself performing as much of the globe recovers from the worst of the coronavirus pandemic.
- UK Retail Sales
Friday will see the release of the latest retail sales data from the UK which are forecast to show growth slowed during April to 4.5%, down from 5.4% in March, although another month of growth could support GBP exchange rates.
This week’s economic calendar is quieter for the New Zealand Dollar, which could cause the exchange rate to trade in a mixed range for much of the week. Pound investors will be keeping a close eye on retail sales, and services and manufacturing PMIs from the UK, which could push GBP higher.