The Pound Sterling to Euro (GBP/EUR), Pound Sterling to Australian Dollar (GBP/AUD), Pound Sterling to New Zealand Dollar (GBP/NZD) and Pound Sterling to Chinese Yuan (GBP/CNY) exchange rates were all trending higher in Wednesday’s European trading as investor sentiment was buoyed by a rise in UK Nationwide House Prices.
The Pound enjoyed support from a climb in April property values, with the Nationwide House Price gauge rising 1.0% on the month. As a result of strong monthly growth, the annual ecostat was pulled up from 5.1% to 5.2%.
New Zealand Dollar to Pound Sterling (NZD/GBP), Australian Dollar (NZD/AUD), Chinese Yuan (NZD/CNY) Exchange Rate Forecast
Meanwhile, the New Zealand Dollar sank against a host of other majors on account of weak data. The ‘Kiwi’ exchange rate had initially risen after better-than-forecast New Zealand trade balance. New Zealand’s trade surplus rose from 83M to 631M in March, rather than the 300M predicted.
However, the trade surplus is expected to be a one-off as the nation re-exported a drilling platform to Singapore. Dairy, New Zealand’s largest export, is continuing to weigh on the Kiwi economy with prices having tumbled by around 60% since last year.
As the price has dropped, Australia has become New Zealand’s largest export destination rather than China.
Statistics expert Jason Attewell commented: ‘This is the first time Australia has been our top export destination since the year ended November 2013.’
Additionally, the New Zealand NBNZ Business Confidence index took a tumble from 35.8 to 30.2 in April, while the ANZ Activity Outlook also stumbled from 42.2 to 41.3. New Zealand’s level of Business Confidence now resides at a six-month low.
However, ANZ economist Cameron Bagrie stated: ‘[Confidence is] holding onto high levels, consistent with an economy entrenched in a robust and steady economic expansion.’
ANZ Business Outlook: confidence dipped slightly in April, driven by agri, but remains at upbeat levels. Pricing indicators are benign.
— Cameron Bagrie (@ANZ_cambagrie) April 29, 2015
Australian Dollar to Pound Sterling (AUD/GBP), New Zealand Dollar (AUD/NZD), Chinese Yuan (AUD/CNY) Exchange Rate Forecast
Meanwhile, the Australian Dollar also took a tumble as Goldman Sachs suggested that Australia could be in danger of losing its AAA credit rating. Only 12 countries hold the prestigious AAA rating and the downgrade to the Oceanic nation would mark the first downward adjustment since 1989.
Goldman Sachs suggested that Standard and Poor’s could make the decision to cut rates as a result of Australia’s ‘poor fiscal performance’. Goldman Sachs notes that the recent adjustments to Standard and Poor’s procedures could see the Aussie nation downgraded from its current stable rating.
Goldman Sachs stated: ‘It is possible that Australia will be put on a “negative ratings outlook”. Such a shift implies, by definition, that a formal ratings downgrade over the subsequent two-year period is a one-in-three chance.’
Chinese Yuan to Australian Dollar (CNY/AUD), New Zealand Dollar (CNY/NZD), Pound Sterling (CNY/GBP) Exchange Rate Forecast
The Chinese economy shares close trade links with both Australia and New Zealand; therefore, Chinese data can impact the way in which the Australian and New Zealand Dollars trade.
Wednesday saw Westpac-MNI Chinese Consumer Sentiment drop from 114.7 to 111.1 in April, which saw the Chinese Yuan to Pound Sterling (CNY/GBP) exchange rate fall. However, the Yuan exchange rate remained upbeat against the Australian Dollar (CNY/AUD) and New Zealand Dollar (CNY/NZD) as the Trans Tasman data pressured the commodity currencies lower.
The Westpac Chinese Sentiment statement read: ‘The increased optimism evident in the March survey, which followed the central bank’s rate cut at the end of February, has been conclusively unwound, with the reality of weak underlying growth confirmed by the Q1 GDP report the stronger force in April.’
Pound Sterling to Australian Dollar (GBP/AUD), New Zealand Dollar (GBP/NZD) and Chinese Yuan (GBP/CNY) Exchange Rate Forecast
Still to come in Wednesday’s session is the Confederation of British Industry (CBI) Reported Sales figure, which could impact the Pound Sterling exchange rate mildly. However, Thursday could be a little more interesting for the Pound with the release of GfK’s Consumer Confidence Survey.
Additionally, the Reserve Bank of New Zealand’s Interest rate decision is due out in Thursday’s Australasian session which could cause major swings in the NZD/GBP, NZD/AUD and NZD/CNY currency pairs.
Meanwhile, the Pound could also be influenced by developments in the Eurozone, with ongoing Greek negotiations a source of significant market movement at the moment. Developments between Greece and its creditors have been slow to say the least and the Euro exchange rate has been weakening against other major currencies as a result.
Wednesday will be a major day for Euro movement with the release of the German Consumer Price Index (CPI) later in the session.
The Pound Sterling to Chinese Yuan (GBP/CNY) exchange rate is reaching 9.5705. The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is trending in the region of 2.0286. The Pound Sterling to Australian Dollar (GBP/AUD) exchange rate is trading at 1.9409; the Pound Sterling to Euro (GBP/EUR) exchange rate is trading at 1.3817.