FX News

NZD/GBP Conversion:

It’s been a risk off week generally with the British Pound (GBP) extending late last week gains against the New Zealand Dollar (NZD) to 1.9315 (0.5180) this morning. The RBNZ hiked its interest rate from 1.0% to 1.5% using the only tool they have to try to bring down rising inflation. The 50-point move was the first time in 22 years aimed purely to rein in inflation expectations which is expected to grow to over 7.0%. Initially the kiwi spiked to 1.8860 post the release but was later sold off even in the wake of improvements in overnight equity reversals. The Pound got a further leg up when UK CPI rose overnight to 7.0% from 6.2% in February marking the highest it’s been since March 1992. Coming in above the 6.7% forecast mainly due to rising fuel and energy costs. With inflation overheating bigtime the UK runs the risk of stagflation. We think 0.5180 (1.9300) will hold into next week as the NZD recovers.

Exchange Rate:
The current interbank midrate is: NZDGBP 0.5184 GBPNZD 1.9290
The interbank range this week has been: NZDGBP 0.5176- 0.5305 GBPNZD 1.8848- 1.9319

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