NZ dollar gains vs. British pound on expectations pace of UK recovery has slowed
The New Zealand dollar touched a week high against the British pound on the expectation positive economic data may have peaked in the UK, indicating the pace of recovery has slowed.
The kiwi rose as high as 50.80 British pence in late New York trading Friday, and was at 50.62 pence at 8am in Wellington from 50.31 pence at 5pm on Friday. The kiwi edged lower to 82.56 US cents at 8am in Wellington, from 82.63 cents at the New York close on Friday and 82.29 cents at 5pm in Wellington on Friday.
The pound is under pressure as investors bet future economic data out of the UK is unlikely to beat expectations. Positive surprises in UK economic data peaked in the third quarter and have faded in recent months with the Citigroup surprise index showing UK data delivery is now fairy neutral relative to expectations, Bank of New Zealand markets strategist Kymberly Martin said in a note.
"Sterling is having a little bit of a pullback," said Stuart Ive, senior advisor at OMF. "It's getting pressure because the data seems to be frontloaded and going into next year, the data is not going to be as strong."
In New Zealand today, traders will be eyeing a Westpac consumer confidence report for the fourth quarter and the BusinessNZ-BNZ performance of service index for November.
Meanwhile in China, traders will be looking for the HSBC flash PMI for December to remain in expansion.
The New Zealand dollar advanced to 92.03 Australian cents at 8am in Wellington from 91.97 cents on Friday ahead of tomorrow's release of the Reserve Bank of Australia minutes from its last meeting.
The kiwi rose to 60.07 euro cents from 59.81 cents on Friday and slipped to 85.15 yen from 85.35 yen ahead of the fourth quarter Tankan business confidence survey today. The trade-weighted index advanced to 77.84 from 77.58 in Wellington on Friday.