Yesterday’s high: NZ$1.9395
Yesterday’s low: NZ$1.9095
GBP/NZD Fails to Hold Highs as UK Data Disappoints
The Pound advanced against the New Zealand Dollar last week amid speculation that the Bank of England (BoE) could be preparing to tighten UK monetary policy more than expected in 2018. However, GBP/NZD gains were limited towards the end of the week as the latest UK manufacturing and construction data fell short of expectations.
UK manufacturing slipped from 56.2 to 55.3 in January while construction fell from 52.2 to just 50.2. The data caused concern that Britain’s economy may not be as resilient at the beginning of 2018 as expected. This dampened Pound bullishness ahead of next week’s BoE meeting.
However, the New Zealand Dollar was unable to capitalise on Sterling’s mixed performance last week. Demand for risky currencies like NZD weakened as Federal Reserve rate hike bets rose thanks to a relatively hawkish Fed meeting and strong US Non-Farm Payroll data.
NZD Outlook: Central Bank News in Focus
There could be a busy week ahead for Pound to New Zealand Dollar exchange rate traders, with both the Bank of England (BoE) and Reserve Bank of New Zealand (RBNZ) set to hold their February policy decisions on Thursday.
If the RBNZ shows a shift in tone or any signs of hawkishness, the New Zealand Dollar is likely to see stronger demand next week, but the main focus will be on the Bank of England.
If the Bank of England takes a more hawkish tone (as Governor Carney hinted it would last week) GBP/NZD could see solid gains. However, disappointing UK PMI data could cloud Britain’s economic outlook enough to make the bank more cautious – and a cautious BoE would likely cause Sterling weakness.
09:30 UK Services and Composite PMI
NZ Global Dairy Trade Auction
NZ Job Market Report
NZ Reserve Bank of New Zealand Policy Decision
12:00 UK Bank of England Policy Decision
09:30 UK Balance of Trade
09:30 UK Manufacturing and Industrial Production
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