GBP/NZD Exchange Rate Struggles on May’s Humiliating Third Vote Failure
UPDATE: The Pound (GBP) fell against the New Zealand Dollar (NZD) following today’s defeat in Parliament of Prime Minister Theresa May’s withdrawal agreement, which lost by a majority of 58 votes.
This came despite the former Foreign Secretary, Boris Johnson, and the Chair of the European Commission, Jacob Rees-Moggs surprise backing of May’s Brexit deal. However, the DUP still remained resilient, resulting in a third humiliating failure for May’s Brexit deal.
No-deal Brexit fears are now haunting UK markets as the UK is due to leave the EU on the 12 April.
The New Zealand Dollar, meanwhile, has benefited after ‘constructive’ US-China trade talks, which concluded today in Beijing.
China is New Zealand’s closest trading partner, and any indications that relations between the two superpowers improving buoys market confidence in the ‘Kiwi’.
US Treasury Secretary, Steven Mnuchin, tweeted:
.@USTradeRep and I concluded constructive trade talks in Beijing. I look forward to welcoming China’s Vice Premier Liu He to continue these important discussions in Washington next week. #USEmbassyChina pic.twitter.com/ikfcDZ10IL
— Steven Mnuchin (@stevenmnuchin1) March 29, 2019
GBP/NZD Exchange Rate Sinks as UK Stuck in Political Deadlock
UPDATE: The Pound (GBP) continued to fall against the New Zealand Dollar (NZD) today as no-deal fears were heightened as the EU went into ‘full-on crisis’ following last night’s ‘indicative votes’ which left the UK in a political deadlock.
The EU’s Chief Negotiator, Michel Barnier, commented:
‘We are working, we are prepared. Yesterday, we had many noes and now we are waiting for a yes.’
Sterling traders have also become increasingly jittery following the Speaker John Bercow saying that he would not allow a third ‘meaningful vote’ simply because there was increased support for the deal.
This has continued to weaken the Pound (GBP) today as the UK remains in a political crisis, and with the clock ticking down to 12 April and no sign of any positive developments, traders are bracing for a possible no-deal Brexit.
GBP/NZD Exchange Rate Falls as Brexit Delays Sought in Parliament
The Pound New Zealand Dollar (GBP/NZD) exchange rate is down around 0.4% today and is currently trading at NZ$1.9267 on the inter-bank market.
Sterling (GBP) struggled against the New Zealand Dollar (NZD) following last night’s ‘indicative votes’ which saw MPs reject every option for the UK’s leaving of the EU.
Margaritis Schinas, a spokesman for the EU Commission, commented:
‘We counted eight nos last night, now we need a yes on the way forward.’
Today saw the announcement that there would be another vote tomorrow, but it has been emphasised that this is not a third ‘meaningful vote’. Instead, the vote will be on whether the UK can secure a delay until 22 May.
A spokesperson for Andrea Leadsom, the Leader of the House of Commons, said:
‘Tomorrow’s motion will need to be compliant with both the Speaker’s ruling and the EU council’s decision on conditionality relating to exit on 22 May.’
‘Discussions are ongoing and we will look to table the motion as soon as possible today, in order to avoid asking for another extension and the requirement to undertake European parliament elections.’
NZD/GBP Exchange Rate Rises despite Disappointing New Zealand Business Outlook
The New Zealand Dollar (NZD) managed to gain on the Pound (GBP) despite disappointing ANZ Activity Outlook figures for March, which came in below expectation at 6.3%.
ANZ analysts commented that residential construction intentions had fallen to their lowest level in a decade, while export intentions also hit record-breaking lows.
The ‘Kiwi’ has managed to recover somewhat after yesterday’s dovishness from the Reserve Bank of New Zealand (RBNZ). This came after the bank said that its next interest rate move was likely to be a cut.
Many NZD traders have been relieved, however, that US-China talks are set to renew today in Beijing with reports that the two economic superpowers are edging closer to a possible trade deal.
China is New Zealand’s closest trading partner, and any indications that a trade deal could be sealed between the two nations would prove beneficial to the economy.
However, with intellectual property becoming an increasingly contentious issue, this has left many ‘Kiwi’ traders remaining cautious.
Xu Chengin of China’s Ministry of Industry and Information Technology, commented:
‘China does not trust the US government… we don’t believe that once our data is in America, the US government will handle it appropriately.’
GBP/NZD Forecast: Sterling Could Soar if DUP Back Theresa May’s Brexit Deal
Pound (GBP) traders will be looking ahead to tomorrow’s publication of the UK’s GDP figures for the fourth-quarter, which are expected to remain steady at 0.2%.
These will be followed by the UK mortgage approvals figures for February which are expected to decrease.
The GBP/NZD exchange rate, however, will be dictated by the outcome of tomorrow’s vote, and with any signs of breaking of the Brexit stalemate, which May faces with the DUP, liable to see the Pound rise.