Brexit-Related Pressures on UK Businesses Drag GBP/NZD Exchange Rate Down
The Pound to New Zealand Dollar exchange rate dropped heavily today, falling by -0.6%.
This deterioration in the value of the Pound comes after the release of concerning data about UK business confidence.
Analysis from Grant Thornton has shown that there are growing concerns about the state of the UK economy, particularly with regard to GDP growth.
Competitiveness is also a major concern, as recent forecasts have estimated that the UK economy will lag behind the rest of Europe in the coming years.
The statistics also showed worries among companies about a lack of innovation in UK business, especially when it came to technological development.
New Zealand Dollar to Pound Exchange Rate (NZD/GBP) Rises on Trade Tariff Reassurances
David Parker stated that Chinese trade tariffs against US goods were unlikely to negatively impact New Zealand, adding that the action has been ‘measured’.
Although the assessment so far has been positive, Mr Parker added that further escalations are not in his country’s best interests:
‘New Zealand is not benefiting from this escalation in protectionism around the world - whether it’s from tariffs or non-tariff barriers, it is problematic for New Zealand.’
GBP/NZD Forecast: PMI readings in Focus as Dairy Auction Approaches
For the rest of the week, Pound to New Zealand Dollar (GBP/NZD) exchange rate movement may be caused by UK construction and services sector PMI readings.
These additional PMI stats are both predicted to show slowing sector activity, which may lead to more GBP/NZD exchange rate losses before the weekend.
A services sector activity slowdown would be particularly bad, as the UK is largely reliant on the field for the bulk of its economic activity.
There is a slim chance of GBP/NZD exchange rate gains later in the week, when Bank of England (BoE) Governor Mark Carney gives a speech on Friday afternoon.
Mr Carney will be speaking at the International Climate Risk Conference; if he hints at possible adjustments to UK monetary policy then the Pound could show movement.
The next set of economic data that could affect the New Zealand Dollar will be out sooner, when the Global Dairy Trade (GDT) price index is announced this afternoon.
The GDT figure previously showed a -1.2% drop in global dairy prices, but it could trigger greater NZD gains if it shows a major rise in prices today.
Also today, the New Zealand Dollar could further be influenced by the ANZ Roy Morgan consumer confidence reading for March.
The sentiment score previously rose to 127.7 points, so another increase in the figure could boost demand for the NZD.