WELLINGTON: The British Pound may have had a poor week against the Euro and Dollar but it soared against the New Zealand dollar.
Pushing on hard after breaking through the 1.75 level the Pound reached 1.7665.
The Kiwi has been under serious pressure, the problems began with the RBNZ Governor coming out all dovish in the last central bank meeting, while everyone else was seeing rising inflation and the US Fed. were lining up the markets in anticipation of a March rate hike.
Since then the problem has been some surprisingly weak data out of China and a falling dairy price.
China is very important to New Zealand and so it feels the effect of Chinese weakness very strongly, hence the impact that poor data can have on the NZD exchange rate.
One of the key exports for New Zealand is its dairy products and so weakness in the price there has a large effect upon the economy.
Despite the Pound being relatively soft, it has still managed to outperform the NZD every day this week.
A slightly risk off sentiment, perhaps surrounding the impending rate hike out of the US and the damage that often does to commodity prices, has caused the Australian to fall which usually correlates to a fall in the NZD as well.
The Pound being less sensitive to risk sentiment has therefore stayed firmer.
