The Pound New Zealand Dollar (GBP/NZD) exchange rate continues to trend broadly higher this morning, on the back of an upbeat UK jobs report.
What’s Been Happening: New Zealand Dented by Risk-Off Trade
Despite some notable volatility, the Pound New Zealand Dollar exchange rate trended broadly higher through last week’s session.
This came as the appeal of the ‘Kiwi’ was sapped by the risk-off mood which prevailed throughout most of the session, although NZD exchange rates also fell in sympathy with the Australian Dollar (AUD), which weakened on the back of a dovish Reserve Bank of Australia (RBA) policy statement.
Meanwhile, the Pound got off to a fairly weak start last week as Sterling sentiment was undermined by renewed Brexit uncertainty and fears over the government’s tax hike plans.
Sterling then received a boost in the middle of the week on the back of comments from Bank of England (BoE) Governor Andrew Bailey, in which he suggested the ‘minimum conditions’ have been met for the BoE to start raising interest rates.
However, these gains were tempered at the end of the week, after the UK’s latest GDP figures revealed domestic growth slowed to a crawl in July.
Three Things to Watch Out for This Week
- UK Inflation Reading
Likely acting as a key catalyst of movement in the Pound New Zealand Dollar exchange rate this week will be the UK’s consumer price index. Will a jump in domestic inflation help to propel Sterling higher?
- UK Retail Sales
Also influencing GBP exchange rates will be the publication of the UK’s latest retail sales figures. Economists are forecasting a jump in sales growth last month which may help to buoy the Pound at the end of the week.
- NZ GDP
NZD investors will meanwhile be focused on the publication of New Zealand’s GDP figures on Wednesday, with a robust growth reading potentially bolstering the appeal of the ‘Kiwi’.
Pound New Zealand Dollar Forecast
Looking ahead, the GBP/NZD exchange rate may continue to trend broadly higher this week as the UK’s upcoming data releases are all expected to print positively.