The New Zealand Dollar (NZD) has underperformed over the week agst the British Pound (GBP) drifting to 0.5160 (1.9380) early this morning before getting a boost from the Bank of England Cash rate announcement, with prices trading back towards 0.5200 (1.9240) mid-morning. The Bank of England (BoE) hiked their interest rate this morning 50 points to 2.25% marking the 7th consecutive rise. This is now the highest rate since 2008, however the hike was seen as less aggressive than some were predicting with only 3 BoE members voting for a 75-point hike and 1 for 25 points, so voting was not conclusive. The Bank has also agreed to start reducing the stock of UK Govt Bonds held in Asset Purchase Facility financed by the issuance of central bank reserves. This equates to over 80 billion over the next 12 months. Ongoing energy woes and incoming concerning UK economic data may lead to further upside moves in the kiwi, we certainly don’t believe the 0.5130 (1.9500) zone will be broken any time soon.
The current interbank midrate is: NZDGBP 0.5190 GBPNZD 1.9267
The interbank range this week has been: NZDGBP 0.5158- 0.5255 GBPNZD 1.9026- 1.9384