The Pound Sterling to Euro (GBP/EUR) and Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rates were both trending within a narrow range on Thursday after the RBNZ cut interest rates from 3.50% to 3.25%, while the Pound Sterling to Australian Dollar (GBP/AUD) exchange rate took a dive after the Australian Unemployment Rate dropped from a negatively revised 6.1% to 6.0%.
The Pound Sterling to Euro (GBP/EUR) exchange rate was trending higher in Wednesday’s European session as investors awaited Bank of England (BoE) Governor Mark Carney’s Mansion House Speech, which is forecast to add detail to the vagueness around UK interest rate hikes. Meanwhile, the Pound Sterling to Australian Dollar (GBP/AUD) and Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rates both sank.
RBNZ Interest Rate Decision Forecast to cause New Zealand Dollar (NZD) Exchange Rate Fluctuations
Investors in the New Zealand Dollar (NZD) will be interested in Thursday’s Australasian session when the Reserve Bank of New Zealand (RBNZ) is forecast to announce its latest interest rate decision. The central bank could make a downward adjustment to its benchmark official cash rate (OCR) after recent data and much speculation that the economy could prosper under loser monetary policy measures.
Currency strategist Jane Foley commented: ‘Recent economic data releases argue in favour of looser policy from the RBNZ. Although expectations of a rate cut have slipped over the past week or so, confirmation of steady rates tomorrow night are likely to support the New Zealand Dollar.’
‘That said, we would expect Governor Wheeler to make his easing bias clear and for any upside in NZD/USD to be short-lived.’
Australian Dollar (AUD) Exchange Rate Climbs amid Weak Data and RBA Rate Cut Warnings
Meanwhile, the Australian Dollar (AUD) climbed despite declines in Aussie data. The Westpac Australian Consumer Confidence Index slipped from 102.4 to 95.3 in June. Confidence appears to have flopped after the shine of last month’s Federal Budget begins to turn into a dull glimmer.
Westpac economist Matthew Hassan commented: ‘It now appears that last month’s surge of optimism was a brief relief rally following the RBA’s May rate cut and a budget that was less damaging than many feared. With these factors now behind us, sentiment has reverted back to a level more reflective of broader concerns about the outlook for the Australian economy. ‘
There’s the distinct possibility that the Reserve Bank of Australia (RBA) could make yet another cut to interest rates in the near future after conducting two downward revisions already this year.
Additionally, RBA Governor Glenn Stevens has warned that he remains open to another rate cut—a development which initially pressured the Australian Dollar (AUD) exchange rate lower.
Euro (EUR) Exchange Rate Forecast for Sensitivity amid Ongoing Greek Negotiations
Meanwhile, the Euro (EUR) exchange rate appears to be in for another day of choppy trading as the situation in Greece rumbles on. Greece has submitted new reforms to creditors this week, but leaks from sources close to Eurozone financial heads suggest that they won’t be accepted.
A senior official stated: ‘They do not want a deal with us; they just want debt relief. I don’t think they will move. I think they’re waiting for us to blink, and we won’t. They don’t understand, we’re not back in 2012 where the Europeans were willing to just throw money at the problem.’
According to Greece’s retailers association, about 59 businesses close down and some 613 jobs are being lost each day
— MineForNothing (@minefornothing) June 10, 2015
#Varoufakis says there's lack of transparency on what is being discussed in ongoing negotiations, lack of transparency not our choice
— Daphne Papadopoulou (@daphnenews) June 11, 2015
Pound Sterling (GBP) Exchange Rate Forecast: GBP/EUR, GBP/AUD, GBP/NZD
The Pound Sterling (GBP) exchange rate was offered some support from favourable UK Industrial Production figures on Wednesday which saw a surprise surge in the sector. Economists had forecast a fall from 0.7% to 0.6% on the year in April; instead, the actual ecostat jumped to 1.2%.
However, a slight disappointment for the UK came in the form of Manufacturing Production data which softened by more than expected, moving from 1.1% to 0.2% on the year in April.
The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is trending in the region of 2.0002.
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is trending at 2.1566.
The Pound Sterling to Euro (GBP/EUR) exchange rate is trending in the region of 1.3702.