GBP/NZD Exchange Rate Falls as NZ Investors Await Trade Balance Data
The Pound New Zealand Dollar (GBP/NZD) exchange rate is down today and is currently trading around $1.9438 on the inter-bank market.
The New Zealand Dollar (NZD) rose against the Pound (GBP) despite the ongoing trade war between the US and China, with China, according to the Foreign Minister Wang Yi, willing to ‘fight to the end’ should the US ‘opt for a policy of maximum pressure’.
Today will see the publication of New Zealand’s trade balance figures for April, which are expected to improve slightly, but with figures still negative it is unlikely to provide any major uplift for the ‘Kiwi’.
Due to African swine fever, a reduced supply of pork has increased the NZ meat trade, with consumers from the world’s second largest economy turning to NZ meat suppliers.
Dominic Stephens, a Chief NZ Economist at Westpac, remained upbeat about the ‘Kiwi’, saying:
‘NZ dollar to start drifting higher, supported by a firm terms of trade, improving sentiment around the outlook for global growth and eventually a gradual normalisation of monetary policy.’
GBP/NZD Exchange Rate Sinks on Renewed Brexit Tensions
The Pound (GBP), meanwhile, has struggled after Prime Minister Theresa May has come under increasing pressure to resign, following the stepping down of Andrea Leadsom, the House of Commons Leader, over frustration with May’s ‘new Brexit deal’.
Sterling (GBP) has remained subdued on increasing Brexit uncertainty, and with the European Elections kicking off today, this has further emphasised the increasing divide between voters and the government, with the Brexit Party gaining favour in the polls.
Sir David Evennett, a Tory MP, captured the mood of many MPs, tweeting:
Theresa May must now resign. We need a new PM a new Cabinet and a new approach to Brexit.
— Sir David Evennett MP (@DavidEvennett) May 23, 2019
Jean-Claude Juncker, the President of the European Commission, however, criticised UK MPs, saying:
‘What I don’t like in the British debate is it seems more important to replace the prime minister than to find an agreement among themselves. This is a woman who knows how to do things but she is unable to succeed in doing things. I like her very much; she is a tough person.’
GBP/NZD Outlook: PM’s Leadership and Brexit to Remain in the Spotlight
Pound (GBP) traders will be looking ahead to tomorrow’s publication of the UK retail sales figures, which are expected to ease.
New Zealand Dollar (NZD) traders, however, will be focusing on global economic developments, with the US and China engaged in continuing disputes over trade, affected market sentiment in the risk-averse ‘Kiwi’.
The Pound New Zealand Dollar exchange will remain driven by political developments, with the European elections and Theresa May’s leadership continually under threat, any signs of a no-deal possibility emerging could affect Sterling further.