GBP/NZD Bullish on RBNZ Rate Hike Pause
GBP/NZD bullish as RBNZ expected to hold rates, AUD pauses
The GBP/NZD currency pair is trading bullishly on Wednesday morning, as traders anticipate that the Reserve Bank of New Zealand (RBNZ) will hold interest rates unchanged at 5.5% for the third consecutive month. This comes amid signs of easing cost pressure in New Zealand, following a cumulative 525 basis point rate hike over the past two years.
The RBNZ has been one of the most aggressive central banks in the world in terms of raising interest rates in order to combat inflation. However, there are growing signs that inflation may be peaking in New Zealand, with the latest data showing that consumer prices rose by 6.9% in the year to June, down from 7.3% in the previous month.
In addition, the RBNZ is facing increasing headwinds from a slowdown in economic growth. The New Zealand economy contracted by 0.2% in the first quarter of 2023, and economists are forecasting further weakness in the coming months.
Against this backdrop, many traders believe that the RBNZ will be reluctant to raise interest rates further at its next meeting on Wednesday. This is positive for the GBP/NZD currency pair, as it suggests that the interest rate differential between the UK and New Zealand will remain in favour of the pound.
The GBP/NZD is currently trading at 2.04, and analysts are predicting that it could rise to 2.10 in the coming weeks, if the RBNZ does indeed hold interest rates unchanged.
Overall, the GBP/NZD is trading bullishly on Wednesday morning, as traders anticipate that the RBNZ will hold interest rates unchanged. This is supported by signs of easing cost pressure and a slowdown in economic growth in New Zealand.
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