Introduction to the GBP/NZD Exchange Rate
The Pound New Zealand Dollar (GBP/NZD) exchange rate is expected to experience significant fluctuations this week, primarily driven by the Bank of England’s upcoming interest rate decision. Markets are forecasting a cut in interest rates from 4.25% to 4.0%, which could lead to a slump in the Pound.
Factors Affecting the Pound
The Bank of England’s decision will be the main catalyst for the Pound’s movement. If the central bank accompanies its decision with dovish commentary, Sterling could experience heavy losses. The UK’s latest manufacturing PMI for July, which remained in contraction territory, has already stymied the Pound.
Factors Affecting the New Zealand Dollar
On the other hand, the New Zealand Dollar will be primarily influenced by the country’s latest labour data, due out on Tuesday. An expected uptick in the country’s unemployment rate could weigh on NZD exchange rates if the data prints as expected. The ‘Kiwi’ has already struggled due to a cautious market mood and a lack of economic drivers.
Weekly Recap
The Pound New Zealand Dollar exchange rate slipped last week due to concerns about the UK’s financial integrity. The Pound began the week mixed against its peers following the release of the UK’s latest CBI distributive trades survey. Although the survey showed an uptick, it failed to rise in line with market expectations, marginally undermining Sterling.
Key Economic Data
Data published by the Bank of England on Tuesday showed that net consumer credit climbed by £1.417 billion in June, exceeding market expectations. However, economists warned that this rise could signal growing financial pressure on households, hobbling GBP on Tuesday. The UK’s latest manufacturing PMI for July increased but remained within contraction territory, stymying the Pound at the end of the week.
New Zealand Dollar Performance
The New Zealand Dollar began the week on the back foot due to a cautious market mood. Although the country’s latest ANZ business confidence index showed a slight uptick, the ‘Kiwi’ struggled to catch bids. A marginally upbeat market mood supported the New Zealand Dollar during mid-week trade, but the end of the week saw NZD exchange rates dip once more following a below-forecast ANZ Roy Morgan consumer confidence index for July.
Conclusion
In conclusion, the GBP/NZD exchange rate will likely experience significant fluctuations this week due to the Bank of England’s interest rate decision and New Zealand’s labour data. The Pound’s movement will be primarily driven by the central bank’s decision, while the New Zealand Dollar will be influenced by the country’s labour market data. As the week unfolds, it will be essential to keep a close eye on these key economic drivers to predict the direction of the GBP/NZD exchange rate.
