The Pound New Zealand Dollar (GBP/NZD) exchange rate has been mixed this morning on the back of the latest UK manufacturing PMI reading.
At the time of writing the GBP/NZD pairing are trending around the NZ$1.9483 level as the ‘Kiwi’ continues to be supported by a more upbeat market mood.
Pound (GBP) Supported by Better-Than-Expected UK PMI Reading
The Pound has found itself edging higher this morning on the back of a better-than-expected manufacturing PMI from the UK for August.
The PMI was forecast to have softened slightly to 60.1, but instead remained around the 60.3 area.
However, manufacturers do still face supply-chain issues which is dampening any further growth in the sector.
Rob Dobson, Director at IHS Markit, commented on the latest figures and what they could mean for the UK’s economy moving forward:
‘Although solid gains in output and new orders were achieved, companies reported that production, delivery and distribution schedules were experiencing substantial delays.’
‘A wide range of factors contributed to the disruption, including port capacity issues, international shipping delays, the re-imposition of COVID restrictions at some key points in global supply networks and ongoing issues post-Brexit. With all of these factors likely to persist for the foreseeable future, manufacturing could well see a further growth slowdown in the coming months.’
New Zealand Dollar (NZD) Strengthens on US Dollar Weakness (USD)
The New Zealand Dollar has found itself broadly appealing against many of its major rivals this morning as a weakening US Dollar bolsters the appeal of the ‘Kiwi’.
Furthermore, a strengthening market mood has driven demand away from safe-haven currencies towards the risk-correlated New Zealand Dollar.
Whilst some concerns remain, markets have become more optimistic surrounding the global economic recovery from the coronavirus pandemic.
It comes as New Zealand’s current lockdown measures appear to be working across the country as coronavirus cases fall.
New Zealand Prime Minister Jacinda Ardern commented on the current coronavirus situation, saying:
‘Every day for me is, another step, a bit of progress, but [it’s] too early. For me I want to see sustained reductions over a period of time and I think actually most people want to see that. It is good not to see some of those high numbers we were only a few days ago. It’s another step. We’ve still got a journey to go through.’
Pound New Zealand Dollar Exchange Rate Outlook: UK Services PMI in Focus
Friday will see the release of the latest services PMI from the UK for August, which will be eyed by Pound investors heading into the weekend.
If the sector continued to grow during the month of August then Sterling could see itself pushing higher.
New Zealand Dollar investors will be keeping an eye on any further developments in the global market mood moving forward.