The Pound New Zealand Dollar (GBP/NZD) exchange rate is climbing this morning as employment figures bolster Bank of England (BoE) rate hike bets. The currency pair firmed last week after the announcement of energy support plans for UK households.
What’s Been Happening: Pound Climbs Despite Dovish Signals from BoE
The Pound (GBP) was bolstered last week by the prospect of some stability following the appointment of Liz Truss as Prime Minister on Monday.
Some uncertainty regarding the BoE’s future pace of tightening may have weighed on Sterling on Wednesday, however.
The announcement of a support package for UK households likely helped to boost GBP on Thursday.
The New Zealand Dollar (NZD) fell last week due in part to its correlation to the Australian Dollar (AUD).
Disappointing trade figures from China also prompted losses for NZD. Below-forecast Chinese inflation figures on Friday helped to boost the currency, however.
A risk-on market mood towards the end of the week also helped to underpin NZD.
- UK Inflation Data
Wednesday’s forecast rise to inflation in August could have a mixed effect on Sterling. The increase could lead to further interest rate hike bets on GBP. On the other hand, the prospect of soaring costs could damage the Pound’s long-term outlook.
- UK Retail Sales Figures
Data on Friday is expected to show a slump to sales in August after having recovered in July. Will the figures dent confidence in the sector’s prospects and heighten recession fears?
- NZ Second Quarter GDP Growth
GDP data is expected to show a return to growth in New Zealand’s economy in the second quarter on Wednesday. Will signs of a strong economy signal action from the Reserve Bank of New Zealand (RBNZ)?
Bets on the Pound could be muted this week as the UK enters a period of national mourning. The prospect of further industrial action may also weigh on Sterling.
The New Zealand Dollar (NZD) could see further movements based on risk appetite, and data releases from China on Friday.