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Pound to New Zealand Dollar Exchange Rate Rises despite Inflation Slowdown Concerns
Published: 16 Jan at 5 PM Tags: Pound Sterling, Dollar Exchange Rate, New Zealand Dollar Exchange Rate, Currency Exchange, UK, Exchange Rates, Economy, Inflation,
Pound to New Zealand Dollar Exchange Rate Rises despite Slowing UK Inflation
The Pound has made a minimal rise against the New Zealand Dollar today, despite the handicap news of slowing UK inflation rates.
Basic annual inflation fell to 3% in December, while the core reading printed lower at 2.5%. While the base reading showed a slowdown, it still remains 1% above the Bank of England’s (BoE) maximum target range.
Nancy Curtin of Close Brothers Asset Management blamed Brexit for the underlying cause of the Pound drop, adding that future services PMIs could show low activity;
‘The Brexit vote brought with it the side effect of depreciating Sterling, and the subsequent rise in import costs, pushing inflation well beyond the Bank of England’s target.
These effects are dissipating somewhat, and core inflation remains lower still. Despite falling inflation, real term wage growth remains elusive.
Household finances will continue to feel tight until wages pick up in real terms, and this will rein in the consumer spending that is so vital to our service-led economy’.
Pound traders were concerned that while lower inflation benefits UK consumers, it also lowers the odds of a near-term BoE interest rate hikes.
The week’s last major UK data will come out on Friday, consisting of average earnings stats for November.
Forecasts have been positive for year-on-year growth, so the Pound could advance if the data matches with estimates.
New Zealand Dollar Declines as Businesses Question New Government
The New Zealand Dollar to Pound decline seen today has largely been caused by low business confidence, given that commodities news was supportive.
Survey results from the New Zealand Institute of Economic Research (NZIER) have shown a 2-year low in business optimism in Q4 of 2017, owing to uncertainty about the new Labour-NZ First government.
It remains to be seen if this is merely a teething problem among national businesses, given that the new administration has only been operational for about two and a half months.
In other news, the Global Dairy Trade price index has risen, indicating an NZ-supporting rise in global dairy costs.
2018’s second reading showed a significant rise of 4.9% growth in dairy prices, building on the 2.2% rise seen in early January.
This represents a strong start to 2018, given that Q4 of 2017 was marked with minimal price growth or more commonplace declines in the global costs of dairy.
The next NZ news will come on Thursday evening, consisting of a business activity reading for December.
If this shows rising activity as some expect, the New Zealand Dollar could appreciate against the Pound.
The Pound has made a minimal rise against the New Zealand Dollar today, despite the handicap news of slowing UK inflation rates.
Basic annual inflation fell to 3% in December, while the core reading printed lower at 2.5%. While the base reading showed a slowdown, it still remains 1% above the Bank of England’s (BoE) maximum target range.
Nancy Curtin of Close Brothers Asset Management blamed Brexit for the underlying cause of the Pound drop, adding that future services PMIs could show low activity;
‘The Brexit vote brought with it the side effect of depreciating Sterling, and the subsequent rise in import costs, pushing inflation well beyond the Bank of England’s target.
These effects are dissipating somewhat, and core inflation remains lower still. Despite falling inflation, real term wage growth remains elusive.
Household finances will continue to feel tight until wages pick up in real terms, and this will rein in the consumer spending that is so vital to our service-led economy’.
Pound traders were concerned that while lower inflation benefits UK consumers, it also lowers the odds of a near-term BoE interest rate hikes.
The week’s last major UK data will come out on Friday, consisting of average earnings stats for November.
Forecasts have been positive for year-on-year growth, so the Pound could advance if the data matches with estimates.
New Zealand Dollar Declines as Businesses Question New Government
The New Zealand Dollar to Pound decline seen today has largely been caused by low business confidence, given that commodities news was supportive.
Survey results from the New Zealand Institute of Economic Research (NZIER) have shown a 2-year low in business optimism in Q4 of 2017, owing to uncertainty about the new Labour-NZ First government.
It remains to be seen if this is merely a teething problem among national businesses, given that the new administration has only been operational for about two and a half months.
In other news, the Global Dairy Trade price index has risen, indicating an NZ-supporting rise in global dairy costs.
2018’s second reading showed a significant rise of 4.9% growth in dairy prices, building on the 2.2% rise seen in early January.
This represents a strong start to 2018, given that Q4 of 2017 was marked with minimal price growth or more commonplace declines in the global costs of dairy.
The next NZ news will come on Thursday evening, consisting of a business activity reading for December.
If this shows rising activity as some expect, the New Zealand Dollar could appreciate against the Pound.
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Source: moneytransfer.co.uk