New Zealand dollar on back-foot vs pound sterling: GBP/NZD approaches 2

The pound sterling has managed to maintain a positive tone against the New Zealand dollar over the past 24 hours and this momentum is likely to continue.

The British pound remains well bid right across the global FX spectrum on Thursday following news that the Bank of England is keeping policy unchanged.

The pound sterling to New Zealand dollar exchange rate (GBP/NZD) is 0.12 pct higher on a day-to-day basis at 1.9932.

The New Zealand dollar to US dollar exchange rate is 0.08 pct lower at 0.8259. The euro to NZ dollar rate is 0.32 pct higher at 1.6485.

(Note: The above quotes are taken from the wholesale spot markets. Your bank will charge a spread on the rate at their discretion. However, an independent FX provider will guarantee to undercut your bank's offer, thus delivering you up to 5% more currency. Please learn more here.)

"Sterling began rising against the New Zealand dollar again yesterday, gaining about a cent to close above NZ$1.99 as speculation about QE tapering in the USA undermined demand for the kiwi," says Sasha Nugent at Caxton FX.

Following the Fed minutes last night analysts speculated that the Fed could taper by $10bn each month for the next seven months, which would undermine both the Australian and New Zealand dollars.

However, the NZ Dollar may not suffer quite as badly as the Australian dollar, because an interest rate rise could be on the cards in New Zealand within the next few months, whereas the Reserve Bank of Australia may cut interest rates.

ECB press conference ahead

For the euro / NZ dollar rate we have the ECB press policy decision and press conference ahead.

Today's ECB press conference may be potential market mover if ECB President Draghi pushes for a more dovish stance to policy.

Although few market players expect any changes in rates, if Mr. Draghi hints that the central bank is open to further reduction in the benchmark rate to 10bp, the pair could come under renewed selling pressure of the euro.