Pound Sterling Losses seen against New Zealand Dollar (NZD) after Consumer Confidence Dips

April 28, 2016 - Written by David Woodsmith

STORY LINK Pound Sterling Losses seen against New Zealand Dollar (NZD) after Consumer Confidence Dips

The Pound has been softened overall today, owing to a -3 point dip for the Gfk consumer confidence result for April.

Though the Pound has managed to make a scattering of gains today, it could be weakened shortly if the UK Gfk consumer confidence survey falls into a negative range as predicted.

FOMC Held the Official Cash Rate, Dollar Softened

Last night’s session in the global currency markets proved to be a tale of two central bank decisions.

The US Federal Reserve led the way, making its latest monetary policy announcement at 1900hrs BST.

As anticipated, the world’s premier central bank opted to maintain its headline interest rate at its current level of 0.50%; support for the US Dollar (currency : USD) held steady in the wake of the news, but analysts forecast that comments contained in the Fed’s accompanying statement could provide the Buck with support into the medium term.

Dovish FOMC Press Conference Weighs on Rate Hike Bets

America’s central bank went on to advise that, ‘a range of recent indicators, including strong job gains, points to additional strengthening of the labour market. Inflation has continued to run below the Committee's 2 percent longer-run objective, partly reflecting earlier declines in energy prices and falling prices of non-energy imports. Market-based measures of inflation compensation remain low; survey-based measures of longer-term inflation expectations are little changed, on balance, in recent months.’

Investors reacted to the Fed’s comments by slightly upping their bets that US interest rates will be increasing in June; the futures’ markets implied percentage chance of such an outcome is now pegged at 15%.

RBNZ Avoid Cutting Rates, NZD Rises

Elsewhere, the Reserve Bank of New Zealand also opted to sit on its hands at 2200hrs yesterday.

Market participants had been pricing-in a real chance that the RBNZ would be trimming its key interest rate from its present level of 2.25%.

The cut did not materialise and support for the Kiwi Dollar increased.

The forecast for the New Zealand unit is now neutral to positive.

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TAGS: American Dollar Forecasts New Zealand Dollar Forecasts Pound Austral Forecasts