Pound-New Zealand Dollar This Week: RBNZ Unlikely to Offer Support

The New Zealand Dollar remained the worst performing major currency over a one-month horizon on Thursday but was this week tipped for a period of outperformance by analysts at TD Securities, and has already begun clawing back earlier losses to a range of rivals thus far in April.

Pound Sterling is firmly on course to record its fourth consecutive monthly gain against the New Zealand Dollar as a fresh bout of interest in the UK currency dominates foreign exchange trade action at the start of the new week, meanwhile investors continue to shy away from the Kiwi as they digest recent housing market policy changes.

The British Pound has retreated further away from the late-March / early-April highs against the New Zealand Dollars, a move exacerbated by a particularly sizeable half a percent decline on Tuesday April 07.

The New Zealand Dollar is forecast to weaken modestly in the short-term and trend lower over the year by foreign exchange analysts at Barclays, who say the currency faces headwinds from the RBNZ and uncertainty about New Zealand's economic recovery.

The New Zealand Dollar has stabilised against many peers this week but recent policy changes in Wellington have dealt a lingering blow to appetite for the Kiwi and helped the Pound-to-New Zealand Dollar rate break up into a higher trading range spanning the distance between 1.96 and 2.00.

The New Zealand Dollar sold off heavily on news that the New Zealand government moved against the rise in housing prices with a raft of measures. John Hardy, Head of FX Strategy at Saxo Bank, says the move could risk denting New Zealand's attractiveness to foreign investors.