The Pound New Zealand Dollar exchange rate dipped today following the release of the latest New Zealand Westpac consumer confidence survey for the second quarter, which beat forecasts and rose from 105.2 to 107.1. Thanks to surging NZ house prices and retail sales driving the nation’s economic recovery, ‘Kiwi’ investors have become increasingly upbeat.
What’s Been Happening:
The Pound New Zealand Dollar exchange rate rose last week as tensions between the US and China limited the appeal of the risk-correlated ‘Kiwi’.
Ed Mills, the managing director at Raymond James, said that tensions between the world’s two largest economies had been ‘going down a path of great confrontation’.
As a result, demand for the New Zealand Dollar slipped, with China being the nation’s largest trading partner. So, tensions between the two nations dampened the outlook for New Zealand’s economic recovery.
That said, New Zealand’s domestic economy has been performing strongly, with last week’s publication of the latest NZ GDP data for the first quarter revised upward to 1.6%.
Analysts at Reuters said that New Zealand’s ‘growth swept fast forecasts on the back of a housing boom and strong retail spending’.
The Pound performed strongly against the ‘Kiwi’, however, as confidence grew in the British economy, despite the delay to lifting lockdown restrictions this month.
Instead, GBP investors celebrated falling joblessness – with the latest ILO unemployment rate dipping to 4.7% in April – and a recovering hospitality and tourist sector, thanks to May’s easing of lockdown rules.
Three Things to Watch Out for This Week
- UK Services and Manufacturing PMIs
Pound traders will be awaiting Wednesday’s publication of the latest UK services and manufacturing PMIs for June. Any signs of growth in either sector would be GBP-positive.
- Bank of England’s (BoE) Rate Statement
Although the BoE is expected to hold interest rates at 0.1% this week, upbeat monetary policy about the outlook for the British economy would boost the Pound New Zealand Dollar exchange rate.
- New Zealand Trade Data
New Zealand Dollar traders will be eyeing Thursday’s release of the latest export and imports figure for May. If this shows a robust improvement in the nation’s exports last month, then the ‘Kiwi’ could creep higher.
Pound New Zealand Dollar Forecast
The GBP/NZD exchange rate could sink this week if risk sentiment shows any signs of improvement. After Prime Minister Boris Johnson said it was ‘looking good’ for a 19 July dropping of lockdown restrictions, other countries could follow suit, buoying confidence in the global economic outlook.