Fears about Turbulent UK-EU Exit Cause GBP/NZD Exchange Rate Losses
UPDATE: The Pound (GBP) has seen a small decline against the New Zealand Dollar (NZD) today, falling to a level of NZ$1.92 on the interbank exchange rate.
This small dip is down to ever-present Brexit fears – the latest concerns have come from comments made by Foreign Secretary Jeremy Hunt.
Mr Hunt has warned that there is a risk of the UK ending up with a ‘no-deal’ Brexit, which is expected to be economically traumatic to the UK.
Steady UK Manufacturing Sector Growth Pushes Pound to New Zealand Dollar Exchange Rate Higher
UPDATE: The Pound (GBP) has advanced against the New Zealand Dollar (NZD) today, thanks to a recent EEF/BDO report.
The annual Regional Manufacturing Outlook has provided a mixture of results; on the positive side, EEF Chief Economist Lee Hopley said:
‘The last twelve months has seen a very strong picture for manufacturing with all parts of the country benefitting from the strength of global markets.’
The GBP/NZD exchange rate gains seen today have nonetheless been limited, as Ms Hopley also stated that:
‘The investment outlook across the UK has been consistently, and disappointingly, subdued.
‘In large part we’ve got ongoing uncertainty about Brexit to thank for that.’
Uncertainty about Key Brexit Meetings Leaves GBP/NZD Exchange Rate Tight
The Pound (GBP) is trading in a narrow range against the New Zealand Dollar (NZD) today, hitting a level of NZ$1.92 on the interbank exchange rate.
This is far below the high of NZ$1.95 seen in mid-July and represents only a small recovery in the GBP/NZD pairing.
The main factor affecting the Pound today has been tension ahead of Prime Minister Theresa May’s Brexit meetings.
Mrs May is due to meet EU leaders over the course of the week as part of her bid to reach a successful agreement on the recently-revealed Brexit white paper.
New Zealand Dollar to Pound (NZD/GBP) Exchange Rate Steady after Deputy PM’s Warning
The New Zealand Dollar to Pound (NZD/GBP) exchange rate has remained close today following a statement from Deputy Prime Minister Winston Peters.
Mr Peters has struck a cautious tone, which has caused NZ traders to hold off on buying the currency:
‘We in New Zealand First believe that an economic correction, or a slowdown, is looming.’
NZD traders have been waiting for signs that the current plateauing of economic growth could lift off in the future, so these remarks have offered little reassurance.
GBP/NZD Exchange Rate Volatility Forecast on UK CBI Data
This week, Pound/New Zealand Dollar (GBP/NZD) exchange rate movement may be caused by a Bank of England (BoE) speech, as well as some Confederation of British Industry (CBI) data.
BoE policymaker Ben Broadbent will be speaking later today, and could boost the Pound with his comments if he hints at a near-term interest rate hike.
Looking ahead, CBI industrial orders and business optimism data is out on Tuesday, followed by distributive trade stats on Wednesday.
The latest forecasts are not especially supportive of potential Pound gains, as economists are predicting lower readings for industrial orders and distributive trades.
The potential saving grace will be the Q3 business optimism index, which might cause GBP/NZD exchange rate gains if it rises from -4 points to 5 as forecast.
This would mean that a majority of businesses responding to the CBI would be expressing optimism, instead of pessimism.
New Zealand Dollar to Pound Forecast: Will NZD/GBP Exchange Rate Decline on Lower Trade Surplus?
There are fewer high-impact New Zealand data releases out this week; the main announcements will be Tuesday’s trade balance reading and Thursday’s consumer confidence measure.
The New Zealand trade balance reading might cause NZD/GBP exchange rate losses, as it is tipped to show a reduction of the existing surplus with a shift from NZ$294m to NZ$200m.
This will still leave New Zealand with an enviable surplus on its trade balance reading, but the downward shift could unsettle NZD traders and enable GBP/NZD gains.
The week’s other major New Zealand news could also devalue NZD; Thursday’s ANZ Roy Morgan consumer confidence measure is predicted to show a slight decline for July’s reading.
A forecast-matching shift from 120 points to 119 could lower NZD demand, even though it would still show more optimism than pessimism among respondents.