The pound remained rangebound against the Kiwi dollar yesterday following the release of positive economic data from both the UK and New Zealand. While New Zealand’s November trade deficit was lower than anticipated, the UK’s Confederation of British Industry (CBI) realized sales unexpectedly surged in the same period. Overall, the GBP/NZD pair traded between 1.9170 and 1.9320 in the past 24 hours.
According to Statistics New Zealand, the country’s trade deficit narrowed to N$1.863 billion in November from N$2.298 billion in the prior month and bettered forecasts calling for a deficit of N$2.062 billion.
On a y-o-y basis, the trade deficit surged to N$14.60 billion in November 2022. In the year ended November 2021, the trade deficit was N$5.90 billion.
Goods exports grew by 18% y-o-y (or N$1 billion) to N$6.70 billion in November 2022. Milk powder, butter, and cheese exports increased 19% y-o-y (or N$375 million) to N$2.30 billion.
Likewise, goods imports increased by 26% (or N$1.80 billion) to N$8.50 billion in the same period. Petroleum and product imports grew by 117% (or N$557 million) to N$ 1 billion. Also, vehicles, parts, and accessories surged 48% (or N$374 million) to N$1.10 billion.
According to the data published by the UK Office for National Statistics, the country’s public sector net borrowing, excluding public sector banks, was £22 billion in November 2022, an increase of £13.9 billion from November 2021 and the highest November borrowing since the organization started collecting records in 1993. Economists were expecting only a maximum increase of £13.5 billion from last November. Total expenses surged from £13.5 billion to £98.9 billion.
The debt interest payable by the UK government was £7.3 billion, reflecting an increase of £2.4 billion from last year and the highest November figure since the ONS started documenting data in April 1997.
The aggregate receipts were £76.9 billion, including tax receipts of £51.6 billion, an increase of £2.2 billion from November 2021.
The UK Confederation of British Industry (CBI) realized sales increased 30 points to 11 in December from -19 in November, which pleased economists who were expecting a further decline in realized sales by 24.
However, retailers expect sales to decline by 17% in January. Sales volumes remained normal with a gain of 3% in December following an increase of 3% in the prior month. In January, sales volumes are anticipated to remain broadly in line with seasonal norms with a gain of 2%.
Furthermore, the data indicated that online retail sales fell by 22% in December, following a decrease of -5% in November. The survey participants anticipate a further decline of 34% in January.
Orders received by suppliers fell by 21% in December, following a decline of 32% in November. Wholesale sales volumes decreased by 14% in December, following a dip of 18% in November. The survey participants anticipate wholesale sales volumes to fall by 33% in January.
The upbeat economic data from both countries are expected to keep the GBP/NZD pair range bound in the short term.
The historical price chart indicates that the GBP/NZD pair is ascending after testing the support at 1.9170. The next major resistance is anticipated only near 1.9560. Additionally, the currency pair is trading above its 50-day moving average, while the MACD indicator is showing a positive reading. Therefore, we anticipate the GBP/NZD pair to remain in an uptrend in the days ahead.
Disclaimer: Any financial trading analysis offered here is our opinion and is not intended as advice or direction for investors. We cannot guarantee the success of any trades made as a consequence of this article, and we encourage traders to incorporate a strong money management strategy to limit losses when they enter the markets. Please use this article as part of your own research before formulating strategies prior to trading.
