GBP/NZD Exchange Rate Slides as No-Deal Brexit Fears Rattle Traders
UPDATE: The Pound New Zealand Dollar exchange rate has dropped off today, with Sterling losing the morning’s gains and falling by -0.4%.
This depreciation comes after comments from Democratic Unionist Party (DUP) MP Jeffrey Donaldson, who has said on social media:
‘looks like we’re heading for no-deal [Brexit].’
‘Such an outcome will have serious consequences for [the] economy of [the] Irish Republic. In addition, [the] UK won’t have to pay a penny more to [the] EU, which means [a] big increase for Dublin.
‘[I] can’t understand why [the] Irish Government seems so intent on this course.’
Brexit remains a key factor in determining Pound exchange rate movement, with signs of negotiation progress boosting GBP and increased risks of a no-deal Brexit outcome devaluing the UK currency.
GBP/NZD Exchange Rate Improves after Financial Secretary Backs Deal
UPDATE: The Pound New Zealand Dollar exchange rate has continued to rise today, with the UK currency appreciating by 0.3% in the pairing.
This continued advance has been supported by earlier remarks from Financial Secretary John Glen.
Speaking in London, Mr Glen said of a UK-EU financial services deal:
‘I am extremely confident we will reach an imminent deal.
‘There is common ground. That is why we are increasingly positive on the expectation of reaching a deal.’
Allowing UK financial services providers continued access to the EU is seen as a desirable outcome, given the risk that many companies may move if there is no deal.
GBP/NZD Exchange Rate Supported by Reports of Brexit Customs Union Deal
The Pound (GBP) has risen by 0.3% against the New Zealand Dollar (NZD) today, following reports of a UK-wide EU customs union deal being agreed.
As with last week’s rumoured Brexit developments, this has been officially denied by Downing Street, but the Pound has still traded higher against the New Zealand Dollar.
The latest rumour is that Prime Minister Theresa May has managed to secure some concessions from the EU, specifically relating to keeping the UK in the EU customs union.
If the reports are accurate, such a deal could allow negotiators to break through the current deadlock over Northern Ireland, although it remains a contentious prospect.
While continued customs union membership would mean minimal disruption to UK trade, Brexit supporters fear that it could allow the EU to impose rules on the UK with little or no recourse.
New Zealand Dollar to Pound (NZD/GBP) Exchange Rate Slips on Cautious Banking Review
The New Zealand Dollar’s (NZD) losses against the Pound (GBP) today have come in the wake of a cautious review of the nation’s banking institutions.
A report from the Reserve Bank of New Zealand (RBNZ) and the Financial Markets Authority (FMA) has identified clear problems among New Zealand’s banks.
These include a lack of proper risk management and a need to have the government hold banks to account on protecting customers.
The only bit of good news in this is that New Zealand’s banking review has not been as damning as a similar examination of Australia’s banks.
GBP/NZD Forecast: Will NZ Dairy Price Data Cause New Zealand Dollar Losses?
This week, Pound/New Zealand Dollar exchange rate movement may be caused by UK trade, GDP, investment and production data out on Friday.
Before then, however, the GBP/NZD pairing could be affected by New Zealand’s jobs market and dairy price data, along with a Reserve Bank of New Zealand (RBNZ) interest rate decision.
The measure of NZ dairy prices could weaken the New Zealand Dollar if it shows a forecast-matching -0.1% decline, while an unchanged unemployment rate reading might have little influence on the NZD/GBP exchange rate.
The midweek RBNZ rate decision could push the New Zealand Dollar up against the Pound, if policymakers hint at higher interest rates in 2018.
Returning to UK news, Friday’s data could provide overall support to the Pound New Zealand Dollar exchange rate.
The national trade deficit is tipped to shrink, a faster pace of GDP growth is anticipated and increased levels of business investment are expected.
September’s production figures might disappoint if they show slower output, but broadly speaking the rest of the UK’s data releases could push the GBP/NZD exchange rate higher if they print positively.