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Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate to be Influenced by Commodity News
Published: 29 Mar at 12 PM Tags: Pound Sterling, Dollar Exchange Rate, New Zealand Dollar Exchange Rate, Currency Exchange, Euro Crisis, UK, Exchange Rates, Inflation,
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate seems likely to have a volatile week with no key New Zealand data due for imminent release and US Fed rate hike bets on the fritz.
Volatile GBP/NZD Pair Moves with the Global Market Tides
Both UK and New Zealand markets had largely closed on Friday and Monday as they observed the long Easter holiday weekend. Despite this, movements from still-open markets – such as those in North America – caused considerable fluctuations while other investors took a break.
The GBP/NZD pairing hopped by around 40 pips yesterday before beginning to tumble again. The traditionally volatile pair is currently trending steadily around 2.1165, and despite its movements since global markets reopened it’s still only slightly up from last week’s closing figures of around 2.1130.
Both currencies have been easily influenced by global and political news since last week, with both the UK and New Zealand having a short break from key data releases.
Since last week’s New Zealand trade balance print and British retail sales data there has been no considerable domestic news and upcoming New Zealand data is especially quiet.
Recent movements in the pair are likely to have been influenced by British economic concerns, as EU referendum discussions raged on in both the UK press and within the government last week on heightened ‘Brexit’ worries. An unreliable 2016 Budget causing Tory infighting followed by new polls showing ‘leave’ numbers gaining ground lead to the Pound suffering from the most volatility for years.
Federal Reserve Rate Worries and Milk Commodity Crisis Inspire Mixed Movements
Worries over New Zealand’s primary commodity export, milk, are ongoing, with powdered milk prices continuing to struggle.
Reuters reports that China is currently stockpiling the commodity as prices fall and the agricultural New Zealand has 85% of farms running at a loss. As one of the key contributors to New Zealand’s economic growth, difficulty of this level has seen long-term lowered sentiment.
Speaking of sentiment, the United States’ Federal Reserve may be less likely to hike interest rates any time soon after US data printed yesterday showed that the Goods Trade Deficit had worsened and personal consumption expenditure came in lower than expected.
This expenditure data is often considered to be a considerable indicator of inflation, and printing lower than forecast indicates that US inflation is not growing as expected.
As doubts bubbled that the Fed would decide against an interest rate hike in April, the quietened Pound saw favour from US investors across the board – resulting in gains against rivals including the ‘Kiwi’.
Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate Forecast: Influence from Risk Sentiment and UK News
Federal Reserve Chairwoman Janet Yellen is set to make a speech later on today where many analysts expect she will make further statements on the state of US economic growth. While policymakers adopted a hawkish tone last week, this has seemingly clashed with yesterday’s consumption expenditure data. Yellen’s words have a strong potential to influence the market further, a dovish outlook from her may drive investors towards a risk-on attitude and have the New Zealand Dollar experience a rally against the Pound.
Ongoing news about the milk commodity crisis may also change investor sentiment towards risk, as an increasingly difficult milk market will be unappealing for investors.
However, the lack of upcoming NZD data is not matched entirely by Britain as the Bank of England Financial Policy Committee is due to publish a statement later today. This will be followed by Fourth Quarter GDP data on Thursday, which is currently expected to show that growth held at 1.9%.
Considerably dovish or hawkish movements from these UK events, as well as the high potential of a continuation in ‘Brexit’-related discussions, are likely to cause further volatility in Sterling as well as the GBP/NZD pair.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trending in the region of 2.1165 while the New Zealand Dollar to Pound Sterling (NZD/GBP) exchange rate trends in the region of 0.4723.
Volatile GBP/NZD Pair Moves with the Global Market Tides
Both UK and New Zealand markets had largely closed on Friday and Monday as they observed the long Easter holiday weekend. Despite this, movements from still-open markets – such as those in North America – caused considerable fluctuations while other investors took a break.
The GBP/NZD pairing hopped by around 40 pips yesterday before beginning to tumble again. The traditionally volatile pair is currently trending steadily around 2.1165, and despite its movements since global markets reopened it’s still only slightly up from last week’s closing figures of around 2.1130.
Both currencies have been easily influenced by global and political news since last week, with both the UK and New Zealand having a short break from key data releases.
Since last week’s New Zealand trade balance print and British retail sales data there has been no considerable domestic news and upcoming New Zealand data is especially quiet.
Recent movements in the pair are likely to have been influenced by British economic concerns, as EU referendum discussions raged on in both the UK press and within the government last week on heightened ‘Brexit’ worries. An unreliable 2016 Budget causing Tory infighting followed by new polls showing ‘leave’ numbers gaining ground lead to the Pound suffering from the most volatility for years.
Federal Reserve Rate Worries and Milk Commodity Crisis Inspire Mixed Movements
Worries over New Zealand’s primary commodity export, milk, are ongoing, with powdered milk prices continuing to struggle.
Reuters reports that China is currently stockpiling the commodity as prices fall and the agricultural New Zealand has 85% of farms running at a loss. As one of the key contributors to New Zealand’s economic growth, difficulty of this level has seen long-term lowered sentiment.
Speaking of sentiment, the United States’ Federal Reserve may be less likely to hike interest rates any time soon after US data printed yesterday showed that the Goods Trade Deficit had worsened and personal consumption expenditure came in lower than expected.
This expenditure data is often considered to be a considerable indicator of inflation, and printing lower than forecast indicates that US inflation is not growing as expected.
As doubts bubbled that the Fed would decide against an interest rate hike in April, the quietened Pound saw favour from US investors across the board – resulting in gains against rivals including the ‘Kiwi’.
Pound Sterling to New Zealand Dollar (GBP/NZD) Exchange Rate Forecast: Influence from Risk Sentiment and UK News
Federal Reserve Chairwoman Janet Yellen is set to make a speech later on today where many analysts expect she will make further statements on the state of US economic growth. While policymakers adopted a hawkish tone last week, this has seemingly clashed with yesterday’s consumption expenditure data. Yellen’s words have a strong potential to influence the market further, a dovish outlook from her may drive investors towards a risk-on attitude and have the New Zealand Dollar experience a rally against the Pound.
Ongoing news about the milk commodity crisis may also change investor sentiment towards risk, as an increasingly difficult milk market will be unappealing for investors.
However, the lack of upcoming NZD data is not matched entirely by Britain as the Bank of England Financial Policy Committee is due to publish a statement later today. This will be followed by Fourth Quarter GDP data on Thursday, which is currently expected to show that growth held at 1.9%.
Considerably dovish or hawkish movements from these UK events, as well as the high potential of a continuation in ‘Brexit’-related discussions, are likely to cause further volatility in Sterling as well as the GBP/NZD pair.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is currently trending in the region of 2.1165 while the New Zealand Dollar to Pound Sterling (NZD/GBP) exchange rate trends in the region of 0.4723.
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Source: moneytransfer.co.uk