GBP/NZD trades near 3-week high with focus on NZ CPI report

The GBP/NZD currency pair held not far from a fresh three-week high on Tuesday, as the kiwi dollar now faces New Zealand’s CPI inflation test.

In the UK, data showed core wage growth had been the slowest since the three months to September 2022, but still strong by historical standards.

Average weekly earnings, excluding bonuses, rose 6% year-on-year to GBP 633 per week in the three months to February, following a 6.1% surge in the prior period.

And, average weekly earnings, including bonuses, rose 5.6% year-on-year to GBP 677 per week in the three months to February, or at the same pace as in the previous period.

The data prompted market players to pare their bets on Bank of England rate cuts this year.

Meanwhile, NZD traders are now expecting the Q1 report on New Zealand’s CPI inflation due out at 22:45 GMT.

Annual consumer inflation in New Zealand eased to 4.7% in the fourth quarter of 2023 – or the lowest rate since the second quarter of 2021.

Still, the rate remained well above the central bank’s target range of 1% to 3%.

Last week, the Reserve Bank of New Zealand kept its official cash rate unchanged at 5.5%, while extending the rate pause for a sixth consecutive policy meeting.

The RBNZ Board again pointed out the official cash rate would have to remain at a restrictive level for an extended period to allow annual consumer inflation to return to target.

Currency Pair Performance

As of 9:48 GMT on Tuesday the GBP/NZD currency pair was edging up 0.37% to trade at 2.1148.

During the Asian trading session, the minor Forex pair went up as high as 2.1151. The latter has been the pair’s strongest level since March 29th (2.1156).