Pound New Zealand Dollar (GBP/NZD) Exchange Rate Jumps on Fresh Wave of Brexit Optimism
The Pound Sterling New Zealand Dollar (GBP/NZD) exchange rate rallied today, rising by around 0.7% on Tuesday, with the pairing currently trading at around NZ$2.0134.
The Pound (GBP) jumped against the ‘Kiwi’ on a fresh wave of Brexit optimism as the European Union’s chief negotiator, Michel Barnier said that a deal could be reached this week despite talks becoming ‘more difficult’. He went on to say it was now ‘time to turn good intentions into legal text’.
Speaking in Luxembourg this morning, Barnier noted:
‘An agreement will be more and more difficult but… is still possible, but obviously any agreement must work for everyone – for all of the UK and the whole of the EU.’
New Zealand Dollar (NZD) Slumps on US-China Trade Caution
The New Zealand Dollar (NZD) struggled today, as traders questioned how much, if any progress was being made in US-China trade negotiations.
While markets welcomed the ‘Phase 1’ trade deal struck between Washington and Beijing, a lack of details sparked caution, leaving the risk-sensitive ‘Kiwi’ under pressure.
National Australia Bank’s (NAB) senior interest rate strategist, Alex Stanley commented:
‘Media reports suggest China wants another high-level meeting later this month to finalise Friday’s agreement, suggesting not all the details are nailed down.
‘Market participants are conscious that previous US-China ‘agreements’ have subsequently broken down amidst misunderstandings among the two sides.’
Sterling (GBP) Jumps Despite Gloomy Unemployment Data
Sterling rose on Brexit optimism despite data released today which revealed UK unemployment for September edged up from 3.8% to 3.9%.
This saw the largest fall in employment in over four years, with the number of people in work unexpectedly dropping by 56,000.
Meanwhile the Office for National Statistics (ONS) showed that in the three months to August, total earnings including bonuses rose by an annual 3.8%.
Commenting on this morning’s data, ONS statistician, Matt Hughes said:
‘The employment rate is still rising year-on-year, but this growth has cooled noticeably in recent months. Among the under-25s, the employment rate has actually started to fall on the year.’
Pound New Zealand Dollar (GBP/NZD) Outlook: Will GBP Extend its Gains?
Looking ahead to Wednesday, the Pound could find some support against the New Zealand Dollar if September’s UK inflation rate edges closer to the Bank of England’s (BoE) 2% inflation target.
However, Brexit is likely to overshadow any ecostats this week as the UK approaches the Halloween deadline.
Meanwhile, the ‘Kiwi’ is likely to be left under pressure if US-China trade agreement details remain scarce.
Could we see Sterling rise sharply against the New Zealand Dollar if news of an impending deal between the UK and EU emerges this week?