Pound to New Zealand Dollar Exchange Rate up Despite Higher Trade Sentiment
Due to developments in UK politics and geopolitics, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate saw mixed movement last week before ultimately ending the week much lower. Those factors remain the focus this week so far.
After opening last week at the interbank level of 2.01, GBP/NZD briefly climbed to a high of 2.02 before fluctuating and falling towards the end of the week, eventually closing the week at the interbank level of 2.00.
While GBP/NZD briefly dipped to the region of 1.99 when markets opened this morning, the pair is now advancing again as Pound (GBP) investors react to the weekend’s latest UK election polls.
Still, the Pound to New Zealand Dollar exchange rate’s advances are limited today, as higher market trade-sentiment is also supporting the New Zealand Dollar (NZD).
Pound (GBP) Exchange Rates Boosted by Hopes for UK Conservative Party
The Pound (GBP) experienced mixed movement last week, amid signs that Britain’s opposition Labour Party had performed better than expected in a televised debate.
However, over the weekend the latest UK General Election polls indicated that the ruling Conservative Party still enjoyed a strong lead over Labour. This boosted hopes that the Conservative Party would win a majority and push its relatively soft Brexit plans into law.
On top of this, Prime Minister and Conservative Leader Boris Johnson indicated over the weekend that if he won the election he would aim to put his Brexit plan to Parliament before Christmas.
Overall, hopes that a Conservative majority could help avoid a no-deal Brexit smoothly kept the Pound buoyed. According to Sean MacLean, Research Strategist at Pepperstone in Melbourne:
‘The markets are holding on to any sort of positivity we get at the moment,
We want to keep that momentum going.’
New Zealand Dollar (NZD) Exchange Rates Avoid Major Losses amid Trade Sentiment
Despite the Pound’s (GBP) stronger demand this morning, the New Zealand Dollar (NZD) was able to avoid major losses due to its own fairly sturdy support.
While New Zealand’s domestic outlook is weighed by Reserve Bank of New Zealand (RBNZ) interest rate cut bets, the trade-correlated currency has instead been supported by trade hopes.
US-China trade relations appeared mixed last week, but despite fears that talks could fall through, hopes persist this week that the nations could still close in on a ‘phase one’ trade deal before the end of the year.
Both US and China’s Presidents made hopeful comments on the possibility of a deal last week.
Weekend news that pro-democracy candidates won a landslide victory in Hong Kong’s local elections also bolstered trade-sentiment this week, amid hopes that the developments could begin to lead to an end to Hong Kong’s months of widespread protest.
Pound to New Zealand Dollar (GBP/NZD) Exchange Rate Awaits Trade News and New Zealand Data
This week’s UK economic calendar will be relatively quiet, leaving Pound (GBP) investors reacting to developments in UK politics, and the Pound to New Zealand Dollar (GBP/NZD) exchange rate driven notably by New Zealand Dollar (NZD) strength.
Key New Zealand data will be published throughout this week, starting with the nation’s Q3 retail sales results during tomorrow’s Asian session.
Trade balance data will come in on Wednesday, with business confidence following on Thursday and consumer confidence and building permits due on Friday.
These stats could give investors a better idea of how New Zealand’s economy is performing and could influence RBNZ monetary policy speculation, but the trade-correlated currency will also be heavily influenced by global trade news.
If the US and China appear even closer to reaching some sort of ‘phase one’ trade deal, the Pound to New Zealand Dollar (GBP/NZD) exchange rate could weaken, but the pair would rise instead if trade relations worsen.