The current interbank midrate is: NZDGBP 0.5097 GBPNZD 1.9619 Huge support at 0.5075 (1.9700), we expect this area to hold. It’s highly unlikely we will see a repeat GDP figure in the next quarter with the economy back operating post lockdowns. With Delta arriving and massive lockdowns in Auckland together with travel restrictions and shipping delays it’s no surprise. NZ quarterly growth ending September came in less worse than expected at -3.7% instead of -4.1% this capped any upside in the kiwi for a while. Earlier in the week UK CPI y/y pushed up to 5.1% from 4.2% in the previous month. The central bank will keep its asset purchase program in place at 875B. The BoE said the strength of the labour market transpired into the need for higher borrowing costs in order to keep a lid on price growth. The Bank of England increased rates to 0.25% from 010% in an 8-1 vote, making it the first “major” central bank to do so. The Pound improved early this morning on the Bank of England policy announcement. Last Weeks Range:0.4943-0.4999 (2.0002-2.0229)ĭata galore this week in the New Zealand Dollar (NZD), British Pound (GBP) made price shifty, bottoming out Wednesday to 0.5080 (1.9690) before a short NZD rally saw price back around the 0.5140 (1.9460) mark late in Thursday trading. The GBP has pushed price lower over the last few days and looks to possibly continue to rally in the coming days with global risk waning and omicron in NZ spreading. Tomorrow’s NZ CPI q/q promises to be another bumper release with expectations it should go well into the mid 5’s pushing past the prior high around 2011 to early 1990 levels. The Bank of England will no doubt hike rates from 0.25% again when they meet on February 3rd. British CPI publishing last week at 5.4% y/y the highest it’s been since in 3 decades above forecast of 5.2%. The 2021 low in the cross was in mid-August when the pair bounced off 0.5000 (2.000), the yearly high was very early January when the cross reversed off a long run of losses at around 1.8740 (0.5335). The last few weeks of trading have been all GBP strength reaching 2.0220 (0.4945) this morning. The GBP continued its rally from 1.8850 (0.5305) from early November. The New Zealand Dollar (NZD), British Pound (GBP) closed out the year at 0.5060 (1.9760). The current interbank midrate is: NZDGBP 0.4901 GBPNZD 2.0404 The overall hawkish tone should see the Pound rally further into the close. With the UK economy now in recovery concerns with inflation loom, withdrawing emergency policies kicked off at the start of the pandemic may prove difficult without dampening growth. The Central Bank is likely to raise rates further but at a gradual pace given the dire consequences of raising too fast as inflation could start to drop as the UK heads into the summer.
The vote wasn’t conclusive at 5-4, with four members preferring a raise to 0.75%, but the reduction of the government bond purchases was. The Bank of England (BoE) hiked rates to 0.50% from 0.25% Thursday to meet their 2% inflation target, to assist with employment and growth. The Bank of England statement and release weakened the Pound back to 0.4900 (2.04) into early Friday sessions. The New Zealand Dollar (NZD), British Pound (GBP) has mostly traded in a small zone this week drifting between 0.4880 (2.05) and 0.4915 (2.0350). The kiwi may struggle to hold onto gains over the rest of the week as it’s highly susceptible to negative risk flow sentiment in the Ukraine/ Russia crisis which is heating up.
The central bank also plans to gradually reduce its Govt Bank buying program over time.
This, in contrast to November’s forecast of 2.6%.
A tightening monetary plan for the next two years has been set with predictions of rises to 2.2% by the end of 2022 and 3.3% in the fourth quarter of 2023. The RBNZ forged ahead with an aggressive policy track Wednesday after hiking their cash rate from 0.75% to 1.0% as expected. Price reversed off 0.4900 (2.0400) levels Monday, the kiwi well supported to 0.5015 (1.9940) early in Thursday sessions. The British Pound (GBP) lost its mojo this week falling away and giving back 5 weeks of gains against the New Zealand Dollar (NZD).
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