GBP/NZD Exchange Rate Improves, but New Zealand Trade Surplus Exceeds Expectations
The Pound New Zealand Dollar (GBP/NZD) exchange rate improved today, leaving the pairing fluctuating around NZ$1.860.
The New Zealand Dollar (NZD) failed to rise against the Pound (GBP) despite last night’s publication of the NZ exports figures for June, which rose to $5.01 billion – up 2.8% against last year.
Imports, meanwhile, fell to their lowest level in 16 months at $4.65 billion.
New Zealand’s year-on-year trade balance figures for June, therefore, eased from $-5.590bn to NZ$-4.940bn.
Exports to China also increased by 27% against last year, which has further improved market confidence in the ‘Kiwi’.
Geraldine Duoba, an International Statistics Manager at Stats NZ, commented:
‘Strong growth in exports to China continues to offset a slowdown in the value of sales to other key markets such as Australia and the EU. China is New Zealand’s largest goods export market, making up 28 percent of all goods exports, and the fastest-growing of our main export markets.’
GBP/NZD Exchange Rate Rises as Boris Johnson and Brexit Remain in Focus
The Pound (GBP, meanwhile, rose against many of its competitors today as markets continue to absorb news of Boris Johnson stepping up as the new Prime Minister of the United Kingdom.
As a known Brexiter, Boris Johnson as PM has caused some concern for Sterling traders, with his previous statement that the UK would leave the EU on the 31 October, deal or no-deal leaving markets feeling jittery.
Priti Patel, the former International Development Secretary, commented:
‘The important job now has to be getting on and doing the job of Brexit. I think, actually, the country is just fed up now, sick and tired of this malaise that we have, this sort of indecision that has gripped the heart of Westminster.’
Today also saw the publication of the UK BBA mortgage approvals figures for June.
Rising from 42.407K to 42.653K, these provided uplift for the GBP/NZD exchange as approvals reached a two-year high last month.
Samuel Tombs, Chief UK Economist at Pantheon Macroeconomics, was upbeat, saying:
‘We expect the gradual upward trend in mortgage lending to be maintained in the second half of this year, despite the looming Brexit showdown.’
GBP/NZD Forecast: Could Sterling Sink on Tory Party Cabinet Uncertainty?
Global political developments are likely to remain in focus for ‘Kiwi’ traders, with any signs of an improving relationship between the US and China benefiting the risk-averse New Zealand Dollar.
Developments surrounding Brexit and Boris Johnson will remain in focus for the rest of the week.
As political adjustments and changes continue to unfold – and with Jeremy Hunt so recently refusing a demotion to defence secretary in Mr Johnson’s new cabinet – we could see the GBP/NZD exchange rate begin to fall on political uncertainty developing within the Tory Party.