Pound Sterling –
GBP AUD exchange rate improved by approximately 0.30% on Monday afternoon, bringing the exchange rate to around 2.0422, and has since dropped in the vicinity of 2.0259 as at this morning.
The cost of Crude Oil appears to be in sync with the GBP movement, when the price per barrel jumped back to around $32, the Pound Sterling followed suit.
Speculation that it is very unlikely the Bank of England will increase interest rates whilst the price of Crude Oil continues to slide.
The GBP to NZD Exchange Rate Forecast is that the pair will increase as the Crude Oil prices influence trader – risk appetite. We saw the exchange rate climb by approximately 0.40% Monday afternoon despite the domestic data released from the UK being nothing to shout about.
History has shown that any influence from exports can take in excess of 12 months to make any significant change in the exchange rate. It is unlikely there will be any quick fix regardless of the immediate movement in oil prices. The current GBPNZD exchange rate is a now around 2.2132.
In the lead up to the release of the fourth quarter British Gross Domestic Product (Q4 GDP) Bank of England governor Mark Carney said “now is not yet the time” to hike rates.
The Kiwi Dollar –
Decline in dairy prices have spread uncertainty about the future of the Dairy Industry in New Zealand if the current low prices continue. New Zealand nationwide house prices figures also showed a dim result.
It was expected that when, on Wednesday this week The Reserve Bank of New Zealand (RBNZ) released its Interest Rate decision, if the rates were cut the GBP/NZD currency pair is likely to boomerang to previous volatility and result in losses.
Results this morning revealed Graeme Wheeler (RBNZ) kept the official cash rate at 2.5% stating that the monetary policy will need to stay loose as inflation takes longer to pick up. The NZD fell to 64.32 US cents from 64.71 cents immediately before the statement was released at 9.00am NZ time.
Aussie Dollar
The release yesterday of the CPI Figures resulted in the AUD jumping by nearly half a percent. Inflation Data was higher than anticipated resulting in the jump to the currency, and immediately traders speculated the flow on effect would likely be no change to the interest rates for now or for at least the next nine months.
It is not expected that the Reserve Bank of Australia (RBA) will take any action on interest rates whilst the Australian unemployment / jobs data is yielding such fantastic results. In the past year there have been an additional 300,000 jobs filled, the unemployment rate now stand at 5.8 percent. In addition to unemployment data, we are also seeing strong activity data with housing finance and credit, and non-mining exports.
In the wake of these results on Wednesday, the AUD increased US 0.4¢ against the greenback, trading at around US 70.34¢ at midday, and continuing into Wednesday afternoon. Global co-head of FX strategy at National Australia Bank Ray Attrill said ………. “If we break through the US70.50¢ mark short term traders would think there was scope for the Aussie to push higher,”
Overnight however after the release of the Fed Statement in the US which found investors feeling somewhat unimpressed with future interest rate hikes being unlikely, the Australian market is likely to be negatively impacted.