GBP/NZD Exchange Rate Plummets as May Must Convince EU for Brexit Extension
UPDATE: The Pound (GBP) has plummeted against the New Zealand Dollar (NZD) today following the news that Prime Minister Theresa May would only delay Brexit until 30 June, and would also go ahead with a third ‘meaningful vote’ despite the previous defeats.
This has caused many Sterling traders to remain cautious as this increases the likelihood of a no-deal Brexit.
A spokesman for the French government, Benjamin Griveaux, commented:
‘France’s position is simple: the British prime minister must explain to us for how long and what for, and offer us guarantees. A delay is therefore not automatic nor certain.’
The New Zealand Dollar, meanwhile, has gained on the weakened Pound today as ‘Kiwi’ traders await the publication of New Zealand’s GDP figures for the fourth-quarter, which are expected to increase to 0.6%.
GBP/NZD Exchange Rate Slips Back as UK in Political Crisis
UPDATE: Sterling (GBP) fell against the New Zealand (NZD) following Prime Minister Theresa May’s spokesperson confirming that May believes the UK is in a state of political crisis. May is now writing to the President of the European Council, Donald Tusk, to clarify aspects on an extension to Article 50.
May’s spokesman said:
‘If you were to look back at the speech the prime minister gave, just before meaningful vote two, she said that if MPs did not support meaningful vote two we would be in a crisis. Events yesterday tell you that that situation has come to pass.’
The New Zealand Dollar, however, has benefited from the publication of New Zealand’s Global Dairy Trade (GDT) Price Index figures which came in at a better-than-expected 1.9%.
GBP/NZD Exchange Rate Stabilises after Speaker John Bercow Rules Out Third Brexit Vote
The Pound New Zealand Dollar (GBP/NZD) exchange rate is flat today and is currently trading within the region of NZ$1.9353 on the inter-bank market.
Sterling (GBP) stabilised against the New Zealand Dollar (NZD) following yesterday’s announcement from the House of Commons Speaker, John Bercow, who ruled out a third ‘meaningful vote’ on Prime Minister Theresa May’s Brexit deal this week – unless, that is, there are substantial changes forthcoming.
With only 10 days until the UK is due to leave the EU, this has caused many Pound traders to remain cautious, as the EU now has to decide on a possible extension of Article 50. Many reports have suggested that this could be up to 9 months.
France’s Europe Minister, Nathalie Loiseau, commented:
‘It’s not a question of really strict conditions. We need something new because if it’s an extension to remain in the same deadlock, how do we get out of this? The British have to come with an initiative that is clear and credible and supported by a majority.’
NZD/GBP Exchange Rate Rangebound as Hopes Rise on US-China Trade Deal
The New Zealand Dollar, meanwhile, steadied against Sterling today as hopes rise that China – New Zealand’s largest trading partner – could shortly come to a consensus over trade with the US.
NZD, however, held steady against the Pound following last night’s publication of the Westpac consumer survey for the first-quarter, which slipped to 103.8.
Many ‘Kiwi’ traders, however, will be looking ahead to the publication of the New Zealand GDT Price Index figures today, which are expected to slip to 0.1%.
These will be followed by the publication of New Zealand’s current account figures for the fourth-quarter, and with any signs of improvement this could provide NZD with some uplift.
GBP/NZD Exchange Rate Falls despite UK Unemployment at 44-year Low
The Pound failed to benefit from the release of the UK average earnings excluding bonus figures for January today, which came in at 3.4% – down by 0.1% against December.
These were followed by the publication of the UK ILO unemployment rate figures for January, which decreased to a better-than-expected 3.9% in a 44-year low.
Mike Jakeman, a senior economist at PwC, commented:
‘It may seem difficult to balance positive jobs and wage data with the fact that business investment has been shrinking for several quarters. It may be that demand in the economy is close to capacity, which is generating demand for new workers, but firms are reticent about committing to major expansion plans until more is known about Brexit.’
NZD/GBP Forecast: Pound Could Soar if EU Extends Article 50
New Zealand Dollar traders are looking ahead to the publication of New Zealand’s GDP figures for the fourth-quarter tomorrow, which are expected to improve at 0.6%, potentially buoying the NZD/GBP exchange rate.
Pound investors, meanwhile, will be looking ahead to the release of the UK Retail Price Index figures for February tomorrow, which are expected to rise to 0.7% against January’s -0.9%.
Tomorrow will also see the publication of the UK’s year-on-year CPI figures for February which are forecast to hold steady at 1.8%.
The GBP/NZD exchange rate will, however, remain sensitive to any Brexit news, and with any signs that the EU could extend Article 50 up to 9 months, this could see Sterling soar.