GBP/NZD Exchange Rate Falls as Sterling Suffers on No-Deal Brexit Jitters
UPDATE: The Pound (GBP) remained subdued against the ‘Kiwi’ (NZD) today as the news mainly focuses on who will lead the Conservative Party following Theresa May’s official resignation as of 7 June.
However, fears are setting in as pro-Brexit Tory MPs like Boris Johnson are fast becoming favourites, leaving many Sterling investors feeling jittery.
Jeremy Hunt, the Secretary of Foreign Affairs, commented:
‘The biggest risk to Brexit now is not an issue of getting a majority, challenging as that is; the biggest risk is a general election, because the Labour party is now changing its position to a second-referendum party.’
The New Zealand Dollar, meanwhile, has remained steady as the NZ Government prepares its ‘wellbeing’ budget, which is drawing some critical remarks from sceptics.
Arthur Grimes, a Wellbeing and Public Policy Professor at Victoria University, said:
‘Every government has done work on health, education and policing … I think it’s more focused, and the rhetoric has been cleverer. But it’s early days, and it may be that it becomes more ambitious.’
GBP/NZD Exchange Rate Sinks as Confidence Dwindles in the Two Main UK Parties
The Pound New Zealand Dollar (GBP/NZD) exchange rate fell today and is currently trading around NZ$1.932 on the inter-bank market.
The Pound (GBP) fell against the New Zealand Dollar (NZD) following the busy weekend in which the European Elections saw the Brexit Party, led by the Brexiteer Nigel Farage, overtake the two main parties by an overwhelming amount of votes.
Jeremy Hunt, the Secretary of State for Foreign Affairs, gloomily commented about the future of the Conservative Party, saying:
‘I want to solve the Brexit crisis we are in and I’m worried if we don’t solve it we will face a political crisis that is far bigger than our legal relationship with the EU; it could lead to the destruction of our party system and the end of my own party.’
Meanwhile, the Shadow Home Secretary, Diane Abbot, has pushed for a second Brexit referendum, saying that it would be a democratic thing to do.
Mrs Abbot said:
‘[T]he Tories have plunged into their leadership contest so we get no sense out of them for a few months. We think it’s important to foreground the people’s vote.’
NZD/GBP Exchange Rate Rises as ‘Kiwi’ Traders Await RBNZ Financial Stability Report
New Zealand Dollar (NZD) traders, meanwhile, will be awaiting the Reserve Bank of New Zealand’s (RBNZ) publication of the financial stability report today, and with any indications that the NZ economy is on rocky ground, this could begin to weaken the ‘Kiwi’.
Ongoing US-China trade tensions, however, are remaining in focus for many NZD traders as the economy is particularly trade-sensitive, with China being NZ’s largest trading partner.
Tensions rose today following the two economic superpowers coming into conflict over US intervention with Taiwan, with China calling for the Trump administration’s ending of engagements with the island.
Lu Kang, the Chinese Foreign Military spokesman, commented:
‘The one-China principle is the political basis for China-US relations. We are firmly against the US engaging in any official contact with Taiwan in whatever form and under whatever pretext.’
GBP/NZD Outlook: UK Leadership to Remain in Spotlight
Tomorrow will see the publication of the New Zealand building permits figures for April, which are expected to improve against February’s result.
This will be followed by a speech by the RBNZ Governor Adrian Orr, and with any dovish comments about the NZ economy, this could see the NZD/GBP exchange rate begin to fall.
Pound traders, meanwhile, will be focusing on political developments in the UK.
Any signs of a hard-Brexiter leader gaining traction within the Conservative Party, this could heighten no-deal fears between the UK and the EU and weaken Sterling.