The Pound to New Zealand exchange rate entered the midweek session near its highest since the Brexit referendum but a deep undervaluation of the Kiwi and the latest Reserve Bank of New Zealand (RBNZ) inflation expectations survey are among reasons why GBP/NZD could be headed for a steady and potentially sharp correction up ahead.
GBPNZD rests near three-year highs, NZDUSD extends July rally, RBNZ guidance shows little rush to hike again.
The Pound to New Zealand Dollar exchange rate soared in midweek trade and its largest intraday rally for more than seven months after the Reserve Bank of New Zealand (RBNZ) largely stayed the course it set out in April but indicated cuts to the cash rate could materialise sooner than markets imagined.
New Zealand's recent budget announcement has not only unveiled significant fiscal measures but also carries implications for the Reserve Bank of New Zealand (RBNZ) and the country's economic outlook, including the potential impact on interest rate hikes.
The New Zealand Dollar rose broadly in the midweek session as rising dairy prices and a resilient labour market appeared to weigh on GBP/NZD but the Kiwi's gains could be limited and short-lived if some economists are right in their interpretations of the data.
The Pound to New Zealand Dollar exchange rate rose to its highest since October in the midweek session after Statistics New Zealand figures showed Kiwi inflation falling to its lowest level for more than a year but some analysts are wary of the outlook for Sterling.
The Pound to New Zealand Dollar exchange rate has rallied strongly over recent weeks but will risk being stopped in its tracks this week if BofA Global Research economists are on the money with their forecast for Wednesday's Reserve Bank of New Zealand (RBNZ) interest rate decision.
The New Zealand Dollar climbed broadly ahead of the weekend in a corrective rebound that further crimp an earlier rally in GBP/NZD if the Reserve Bank of New Zealand (RBNZ) keeps its eye on the prize that is the Kiwi inflation target by reiterating its February outlook for the cash rate next week.
The New Zealand Dollar climbed against all other major currencies in the mid-week session after the Reserve Bank of New Zealand (RBNZ) reiterated a hawkish outlook for its cash rate, stemming a month of underperformance by the Kiwi but drawing mixed responses from analysts and economists.
The New Zealand Dollar edged higher against a range of major currencies in mid-week trade after the Reserve Bank of New Zealand (RBNZ) said its latest analysis suggests that interest rates still need to rise in line with the forecasts and assumptions set out back in November.
The New Zealand Dollar lagged behind many other major currencies this week and its prospects are currently obscured by exceptionally high uncertainty over the outlook for the Reserve Bank of New Zealand (RBNZ) cash rate owing to recent inflation developments and natural disasters in the country.
The New Zealand Dollar was an outperformer in midweek trade after the Reserve Bank of New Zealand (RBNZ) said it will raise Kiwi interest rates further than was previously thought in order to bring down inflation, prompting analysts and economists to contemplate the implications for the currency and economy.
The New Zealand Dollar popped higher on Wednesday and turned GBP/NZD lower from the week's highs in the process after the Reserve Bank of New Zealand (RBNZ) came across as its most hawkish yet when warning that interest rates still have a long way left to rise if inflation is to be returned to its target.
NZD rose after RBNZ hiked 50bp to 3.5%, in line with market consensus expectations, but signalled it was considering an even larger hike.
The New Zealand Dollar edged higher against most other major currencies in the final session of the week, partially reversing otherwise steep declines after appearing to draw a bid from the market following contact with a major level of technical support on the charts.
"There looks to more substance behind the Q2 figures, with the opening up of the NZ economy a clear positive" - ASB.
The RBNZ raised interest rates again and signalled it would raise them to levels higher than they had previously been expecting, but the market's verdict of the August policy update and guidance resulted in a New Zealand Dollar sell-off.
The New Zealand Dollar edged higher against many of its major peers including a buoyant Pound in the mid-week session but its gains may have had more to do with a retreat by the U.S. Dollar than the Reserve Bank of New Zealand’s (RBNZ) brisk pace of monetary tightening.
The New Zealand Dollar rallied after the Reserve Bank of New Zealand raised interest rates by a further 50 basis points and looks set to do so again at the next two meetings, say analysts.