We have seen a lot of volatility in the British Pound (GBP), New Zealand Dollar (NZD) this week with price moving lower early week then advancing to 0.5195 (1.9250) midweek as the RBNZ hiked interest rates from 1.5% to 2.0%. There is undoubtedly more to come for the RBNZ with predictions we may see the interest rate climb to 3.3% by the end of this year. Thursday’s flow was back with the GBP with hawkish speak coming from the Bank of England sending moves back towards 0.5130 (1.9500). The UK PMI read for May confirmed the economy ground to a halt siting rising inflation which are weighing on demand conditions. This is not helping to ease fears of a looming recession in the UK as early as next year. The BoE has already priced in 5 more hikes for 2022 but now could pull back to 4 or less. Overall trend in the NZD/GBP is still bearish with expectation of a retest of 0.5080 (1.9680) the previous low in the coming days.
The current interbank midrate is: NZDGBP 0.5135 GBPNZD 1.9474
The interbank range this week has been: NZDGBP 0.5114- 0.5195 GBPNZD 1.9247- 1.9553