NZ dollar falls to near 2-week low vs pound on speculation UK data may support rate hike
By Jonathan Underhill
April 17 (BusinessDesk) - The New Zealand dollar fell to near a two-week low against the pound on speculation economic data including employment and wages will build the case for a rate hike by the Bank of England next month.
The kiwi dollar fell to 51.29 British pence as at 8am in Wellington from 51.58 pence late yesterday. The local dollar traded at 73.55 US cents from 73.54 cents yesterday.
The UK probably added 55,000 jobs in February, less than a third of the previous month's figure although economists at ING reportedly expect between 80,000 and 90,000 jobs were added, with wage growth of about 2.8 percent year-on-year. The Bank of England kept its key rate unchanged at 0.5 percent last month but expectations are building for a quarter-point hike to 0.75 percent in May. Meanwhile British and European Union officials have begun a new round of Brexit talks
"Expectations for upcoming data, M&A chatter and Brexit negotiations kicking off once again are all supporting the GBP, and leaving this cross with a downside bias," said Liz Kendall, senior economist at ANZ Bank New Zealand in a note. "It was generally a range-bound night for kiwi overnight, but it remains at the whims of global forces."
In New Zealand today, traders will be watching for March real estate sales and the latest Global Dairy Trade auction tonight. And on Thursday, the market will be watching for first-quarter inflation data with economists expecting annual inflation of 1.1 percent. The tepid data will add to the view the central bank will keep rates on hold for the foreseeable future.
The trade-weighted index was at 75.30 from 75.41 yesterday.
The kiwi dollar traded at 94.53 Australian cents from 94.61 cents and traded at 78.78 yen from 78.86 yen. It fell to 59.40 euro cents from 59.63 cents and declined to 4.6148 yuan from 4.6207 yuan.