GBP/NZD Exchange Rate Rangebound as Boris Johnson is Challenged over No-Deal
The Pound New Zealand Dollar (GBP/NZD) exchange rate is holding steady at NZ$1.8901 today following Labour leader Jeremy Corbyn’s call for cross-party solidarity against Prime Minister Boris Johnson. Corbyn urged MPs to back the opposition in the event of a snap general election.
Mr Corbyn is expected to say in today’s speech:
‘A general election triggered by the Tory Brexit crisis will be a crossroads for our country. It will be a once-in-a-generation chance for a real change of direction, potentially on the scale of 1945 or 1979. Things cannot go on as they were before.’
While Sterling traders are remaining cautious, Shadow Chancellor John McDonnell was upbeat:
‘I think the opposition parties [are] reaching across to Conservative MPs as well, I think there is still a majority in parliament to say to Boris Johnson that we will not accept a no-deal.’
Meanwhile, today saw the publication of the yearly UK Rightmove House Price Index which rose from -0.2% to 1.2%.
Miles Shipside, a Director at Rightmove, said:
‘Whilst another approaching Brexit deadline is now nothing new for prospective buyers, this one may seem more definite, and therefore one to beat, with the Government regarding this one as ‘do or die’.’
NZD Exchange Rate Supported by Upbeat Domestic Data
On Sunday New Zealand Dollar (NZD) exchange rates were supported by New Zealand’s Performance of Services Index. The measure pushed further above the 50 mark separating growth from contraction, hitting 54.7.
New Zealand’s Producer Price index also recovered in the second quarter, further boosting NZD.
However, the New Zealand Dollar’s potential for gains was limited by the impact of US-China trade tensions on risk appetite.
US President Donald Trump has said that trade talks are progressing. However he failed to acknowledge the possibility of a deal between the two superpowers in the near-term.
We are doing very well with China, and talking!
— Donald J. Trump (@realDonaldTrump) August 18, 2019
Larry Kudlow, the White House Economic Advisor, is hopeful of progressing US-China trade talks:
‘If those deputies meetings pan out, as we hope they will, and we can have a substantive renewal of negotiations, then we are planning to have China come to the USA and meet with our principals to continue the negotiations and the talks’
GBP/NZD Outlook: NZ Global Dairy Trade Price Index in Focus
New Zealand Dollar (NZD) traders will now be looking ahead to tomorrow’s NZ Global Dairy Trade Price Index.
Any sign of improvement in the price of New Zealand’s most lucrative commodity could weaken the GBP/NZD exchange rate. Brexit speculation will also have an impact on the pairing.