GBP/NZD Exchange Rate Flat as UK Politics Remain in Focus
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is holding steady this morning as UK politics remain under scrutiny.
At the time of writing the GBP/NZD exchange rate is virtually unchanged this morning at NZ$1.9323.
UK Politics Continue to Dominate the Pound (GBP)
Boris Johnson’s decision to suspend parliament next month continues to drive Sterling sentiment this morning.
This leaves the Pound (GBP) rangebound as MPs weigh up their current options.
Parliament returns from summer recess next week and MPs opposed to a no-deal Brexit will be all too aware of the limited timeframe they have to take action to block it.
This has forced MPs usually found at opposite ends of the political spectrum to engage with one another to try and find a workable solution.
The focus for GBP investors now will be on what route this ‘rebel alliance’ decides to take, whether they think there is enough time to pass legislation or if they will pursue the ‘nuclear’ option of calling for a no-confidence vote.
New Zealand Dollar (NZD) Muted as RBNZ Rate Cut Expectations Rise
The New Zealand Dollar (NZD) trended lower overnight on Thursday as the ongoing US-China trade dispute and signs of a slowing domestic economy stoke speculation interest rates will continue to fall.
The Reserve Bank of New Zealand (RBNZ) has cut rates twice so far in 2019, with a cut of 50 basis points in August lowering interest rates to a record low of 1%.
The latest indicator that further monetary easing may be incoming was the publication of latest domestic business confidence index earlier this week.
Business expectations fell to a decade low last month, stoking further concerns about the health of New Zealand’s economy.
In light of this and ongoing tensions between the US and China markets have priced a 85% chance of another rate cut from the RBNZ in November.
GBP/NZD Exchange Rate Forecast: Brexit Developments Likely to Overshadow UK PMIs
Coming up next week, markets will be given fresh insight into the state of the UK economy with the publication of the country’s latest PMI figures.
However their impact on the Pound New Zealand Dollar (GBP/NZD) exchange rate may ultimately prove negligible as UK politics are likely to continue to act as the main catalyst of movement between the pairing.
While New Zealand economic data is looking pretty thin on the ground next week, the country’s close association with Australia could see the ‘Kiwi’ react to the Reserve Bank of Australia’s (RBA) latest rate decision.
This may push RBNZ exchange rates lower next week as a dovish RBA may keep the pressure on the RBNZ to continue lowering rates.