RBNZ cut New Zealand interest rates

11 June, 2015

Simon Eastman

Yesterday was a mixed day for sterling eco stat wise as manufacturing production showed a decrease in expectation, while industrial production saw an increase over forecasts. The result however was positive for the pound as we saw sterling increase against both the euro and the U.S. dollar,gaining a cent and a half against both its main pairings.

It was likely helped by Greek inflation coming in way under the expected figure, coupled with the fact we still don’t see any sign of a resolution to their debt issues, although Germany did come out yesterday saying an extension to their current debt repayment was possible. This has been ongoing though, and considering Greece didn’t pay its last instalment without penalty, it seems markets are resound to the fact, they will continue defaulting until an agreement is met.

The NIESR GDP estimate came in a little above forecasts giving extra benefit to the pound, which bodes well for when the actual ONS figure comes out later in the month, while a speech by BoE chief Mark Carney did little to impact rates yesterday evening.

Overnight the RBNZ cut New Zealand interest rates by 25 basis points giving sterling another 4 cents against the ailing antipodes currency which sees exchange rates at some of the best for sending money to New Zealand in over 5 years.

We also had its neighbour Australia posting unemployment figures early this morning, showing an improvement in those with new jobs, shaving a cent off the rates for sending money to Australia which has recently seen a 15 percent swing in sterling favour.

So on to today and it’s a lot quieter with nothing from the UK and just a few bond auctions from Europe to contend with before retail sales over in the States after lunch. This is likely to mean sentiment led trading which could hurt sterling without anything to support it, so make sure to stay in touch with your CI currency consultant if you have an upcoming transfer to make. The pound is already heading south against the dollar and euro so it seems yesterday could well have been a glitch in the recent downward trend of sterling performance.