Pound New Zealand Dollar Week Ahead Forecast: 2.20 Today, Gains From Here?
The Pound New Zealand Dollar (GBP/NZD) exchange rate wavered last week following a number of high impact data releases.
At time of writing, GBP/NZD traded at around NZ$2.1974, virtually unchanged from Friday’s opening rate.
The Pound (GBP) started the week trading sideways against most of its peers, but saw a slight uptick on Tuesday following the release of the UK’s latest labour data.
The data revealed an acceleration in wage growth and a lower-than-expected unemployment rate.
However, the Pound’s gains were limited after the Bank of England (BoE)’s Governor Andrew Bailey warned of a ‘weak growth environment.’
On Wednesday, the UK released its latest consumer price index (CPI), which showed headline inflation rising to 3%.
Despite this, the Pound remained volatile as the data did not significantly alter expectations for an interest rate cut by the Bank of England.
The end of the week brought a mix of UK economic data.
The latest retail sales index and services PMI both exceeded market expectations, while the latest manufacturing index fell further below the expansion threshold.
The New Zealand Dollar (NZD) began the week trending mostly flat against its counterparts as a lack of domestic data releases left the ‘Kiwi’ without a clear trajectory.
However, on Wednesday, the Reserve Bank of New Zealand (RBNZ) enacted a widely expected 50 basis-point interest rate cut.
Initially, NZD exchange rates slumped following the announcement before a risk-on market mood saw the currency bounce back.
The end of the week saw the New Zealand Dollar struggle to catch bids following some downbeat domestic balance of trade data.
GBP/NZD Forecast: Risk Appetite in the Spotlight?
This week, the main factor influencing the Pound New Zealand Dollar exchange rate will likely be market risk appetite.
With a limited number of economic data releases from both the UK and New Zealand, the GBP/NZD exchange rate is expected to be largely influenced by overall market sentiment.
A shift towards more positive trading conditions could result in a decline in GBP/NZD exchange rates over the course of the week.
Adam Solomon
Contributing Analyst
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