The Pound advanced against the New Zealand Dollar (GBP/NZD) on Tuesday while remained in a tight range against the Kiwi’s close counterpart, the Australian Dollar (GBP/AUD).
Sterling’s strength has been continuing on the back of hopes of UK interest rate rises and data appearing in markets today showing the UK Unemployment rate his hit a fresh 42-year low, while wage growth overtook inflation.
Meanwhile, the New Zealand Dollar could be in for a big day in Wednesday’s Trans Tasman trading when the latest New Zealand Consumer Price Index (CPI) makes its way onto the market. At present, it looks as if the inflation reading might disappoint, with forecasts suggesting a fall in the first quarter on the year to 1.1%, from the previous 1.6%.
While Wednesday may be influential for the Kiwi Dollar, Thursday could be the big day for the Aussie. Labour market data is due out, detailing the Australian Employment Change and Unemployment Rate numbers; the latter is expected to fall from 5.6% to 5.5% in March.
This week also saw the release of the latest Reserve Bank of Australia (RBA) meeting minutes. The minutes didn’t share much new information but said that the next interest rate adjustment is likely to be a shift higher, but it’s still unclear when such a move is likely to take place. The Aussie was offered little support against other currency majors on the news as the RBA still drags its heels on monetary policy while other major central banks look to tighten their stance.
Australia and New Zealand’s largest trading partner, China, posted growth figures in Tuesday’s session too. Growth in the first quarter on the year came in at 6.8%, while the quarter-on-quarter figure slipped slightly below the expectation of 1.5%, at 1.4%. The Pound is trading in a tight range against the Chinese Yuan.
Markets are currently awaiting details of New Zealand’s latest dairy auction which has taken place today. Numbers should be leaking out from Global Dairy Trade (GDT) soon, and could give the New Zealand Dollar another reason to weaken if they fall in line with recent declines.
UPDATE: The dairy auction numbers came in positively, with the GDT index climbing by +2.7%. The price of butter increased by +2.9%, while cheddar rose by +4.6%. Whole milk powder increased by +0.9%, and skimmed milk powder experienced a bigger climb of +3.6%.