GBP/NZD Exchange Rate Dragged Down by Sliding GBP Trader Confidence
UPDATE: The Pound New Zealand Dollar exchange rate has fallen sharply today, with Brexit concerns and an unenthusiastic reception to the budget dragging Sterling down.
In the former case, Chancellor Philip Hammond unveiled more funding for a no-deal Brexit in his budget reveal, but neglected to elaborate on the planning process for this outcome.
In the latter, other aspects of the budget such as £400m funding for schools have been deemed inadequate and led to a backlash against the spending plans.
GBP/NZD Exchange Rate Ticks Higher ahead of Autumn Budget Reveal
UPDATE: The Pound Zealand Dollar exchange rate has improved compared to this morning, with Pound Sterling trading in a narrow range against the New Zealand currency.
This appreciation comes in the lull before the UK Autumn Budget is revealed at about half past three this afternoon.
Among other potential offerings are business rates relief – Begbies Traynor Partner Julie Palmer says of the issue:
‘The old rates system still needs to be adjusted for a modern trading environment, otherwise when the stimulus ends the old issues will return.
‘If the government can update the existing system it can unravel one of the barriers for retail and potentially stop the rot of businesses moving away from the high street.’
Among other potentials, an improvement in conditions for UK businesses could boost Pound trader confidence and cause GBP/NZD exchange rate gains today.
Pre-Budget Jitters Drag GBP/NZD Exchange Rate Lower
The Pound (GBP) has fallen to a multi-week month low against the New Zealand Dollar (NZD) today, ahead of this afternoon’s UK Budget.
The latest decline – of -0.4% – is down to uncertainty about whether the spending plans will be cautious or generous, given the circumstances.
Chancellor Philip Hammond is under pressure to boost spending after the Prime Minister declared that ‘austerity is over’, but must factor Brexit and limited UK economic growth into his calculations.
Mr Hammond is tipped to reveal increased spending for pothole repair and mental health services, although GBP traders are more interested in what kind of allowances will be made for Brexit.
New Zealand Dollar to Pound (NZD/GBP) Exchange Rate Rises on China-US Clash
The New Zealand Dollar (NZD) has capitalised on current market uncertainties to rise sharply against the Pound (GBP) and other currency peers today.
This appreciation comes as the US Dollar drops in value with the ongoing China-US economic spat continuing to fester.
Summing up the current uncertainties generated by the Chinese Yuan’s depreciation, ANZ Bank Chief Economist Sharon Zollner says:
‘Chinese authorities are walking a tightrope between allowing sufficient depreciation to cushion the blow to exporters of the tariff war with the US, while not spurring expectations of a greater depreciation and hence large and potentially destabilising capital outflows.’
GBP/NZD Forecast: Volatility ahead on Autumn Budget
This week, Pound New Zealand Dollar exchange rate movement is likely to be driven by today’s Budget.
If Chancellor Philip Hammond unveils a surprise spending spree for the months ahead, despite Brexit risks, then the Pound could appreciate.
On the other hand, a cautious spending plan might not excite GBP traders and could cause Pound Sterling losses.
Beyond today’s budget, the GBP/NZD pairing could also be affected by a UK consumer confidence reading on Wednesday, followed by Thursday’s Bank of England (BoE) meeting.
The confidence figure could weaken the Pound, as it is expected to worsen from -9 points to -10.
The BoE meeting isn’t expected to bring any adjustment to interest rates, but the Pound could still appreciate if policymakers seem confident about UK economic resilience under Brexit conditions.
Rounding off weekly news for GBP traders will be Thursday and Friday’s respective manufacturing and construction PMIs.
Both sector activity measures are tipped to slow, which could cause late-week GBP/NZD exchange rate losses.
New Zealand Dollar to Pound Outlook: Risk of Turbulence on Permits and Confidence Data
This week’s data from New Zealand will consist of building permits data on Tuesday, followed by business and consumer confidence stats on Wednesday and Thursday.
Fewer permits being granted could weaken the NZD, as could a dip in business confidence.
Thursday’s consumer confidence reading is expected to show some improvement, which could enable late-week NZD/GBP exchange rate gains.