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GBP/NZD Rate Turbulence Possible on UK Confidence Data

Last week’s high: NZ$1.9447

Last week’s low: NZ$1.9012

 

Pound Bolstered by Average Earnings Growth

The Pound rose against the New Zealand Dollar over the previous week, thanks to increasing optimism following positive UK data.

The main indicator driving this optimism was an unexpected rise in average earnings in November. This raised hopes that the Bank of England (BoE) would pursue tighter monetary policy, given the national wage gap was narrowing.

The New Zealand Dollar was primarily influenced by the news that the Trans-Pacific Partnership (TPP) would be going ahead, following a year of renegotiations. The deal is expected to be signed in March 2018, but some were sceptical about how much it would add to economic growth for member nations.

NZD Outlook: Volatility ahead on UK Confidence Stats

The Pound may struggle against the New Zealand Dollar on Wednesday if the GfK consumer confidence reading shows another negative reading.

Later in the week the GBP/NZD exchange rate could be influenced by UK PMI readings. If these decline then the Pound could fall further in value.

Today’s NZ trade balance reading for December will be the only major data release of the week. Estimates are for a sharp trade deficit reduction, with the NZD likely to appreciate on such a result.

Key Events

29 January

21:45 NZ Balance of Trade

31 January

00:01 UK GfK Consumer Confidence

1 February

09:30 UK Manufacturing PMI

2 February

09:30 UK Construction PMI

 

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To keep up to date with the New Zealand Dollar, visit the NZD blog in our Currency News section.

 

Joe Mayhew
Senior Currency Broker
T: 01442 892 060

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