The Pound exchange rate began Thursday in a tight range against the US Dollar (GBP/USD), Euro (GBP/EUR), and New Zealand Dollar (GBP/NZD). It’s a relatively quiet day in terms of economic data, leaving political events and central bank developments to take the helm and direct movement.
Pound Exchange Rate (GBP/EUR, GBP/USD) Gains on Brexit
The Pound has gained some broad-based support on Brexit optimism, and regular news reports encouraging that a deal is close have continued to boost the Sterling exchange rate. Meanwhile, lacklustre Eurozone data has failed to help the common currency gain any ground, while US midterms take their toll on the US Dollar.
US Midterm Elections Deal Blow to Trump and US Dollar Exchange Rate
Although the outcome of the midterm elections was expected by many, the result has been a shock to US President Donald Trump’s stability. With the Democrats gaining control of the House of Representatives, they could take steps to impeach the President and block his legislation.
Reserve Bank of New Zealand (RBNZ) Maintains Interest Rates
Meanwhile, in New Zealand, the Reserve Bank of New Zealand (RBNZ) kept interest rates on hold for two years, stating there was little chance of an adjustment from its current record lows until 2020. The Official Cash Rate (OCR) has stagnated at 1.75% since November 2016 and guidance from the Bank suggests there’s little reason to amend it.
RBNZ Chief Adrian Orr commented:
‘We will keep the OCR at an expansionary level for a considerable period to contribute to maximising sustainable employment, and maintaining low and stable inflation.’
Earlier in the Trans Tasman session, the New Zealand Unemployment Rate dropped from 4.4% to 3.9% in Q3 on the year, a complete surprise for markets which expected to see joblessness remain at the same level. Employment Change numbers also smashed forecasts, coming in at 2.8% rather than stumbling in at 2.0% as expected. The data gave the Kiwi Dollar exchange rate a boost ahead of the RBNZ announcement.
Interbank Exchange Rates Today
The Pound to New Zealand Dollar (GBP/NZD) exchange rate is trading at 1.9351. The Pound to US Dollar (GBP/USD) exchange rate is reaching 1.3116. The Pound to Euro (GBP/EUR) exchange rate is trending in the region of 1.1482.