While the Pound lacks much in the way of fresh support, the Pound to New Zealand Dollar exchange rate is climbing today. Following yesterday’s mixed movement, the New Zealand Dollar is seeing more losses today as investors sell currencies associated with risk and trade. This is due to coronavirus and US-China trade fears.
Last Week: Volatility Amid Coronavirus and Risk Uncertainties
The Pound to New Zealand Dollar exchange rate was highly volatile last week. In the middle of the week, the Pound was sold sharply amid a fresh round of no-deal Brexit fears.
However, the New Zealand Dollar’s appeal as a safe haven currency continued to weaken throughout the week. It came as global coronavirus fears worsened, with markets becoming more anxious that a ‘second wave’ was inevitable.
On top of this, the Pound did find some limited support in stronger than expected UK retail and PMI data at the end of last week.
Three Things to Watch For This Week
- New Zealand Confidence Data
New Zealand’s ANZ business confidence data will be published during Thursday’s Asian session, with consumer confidence following on Friday. They could boost NZD support if they impress investors.
2. Federal Reserve Policy Decision
Wednesday’s American session will see the Federal Reserve make its July policy decision. If the Fed takes a more dovish stance than expected, it could make investors more willing to take risks and buy currencies like NZD.
3. Coronavirus Developments
If global fears of a ‘second wave’ of coronavirus infections intensify, this could weigh on the market’s appetite for currencies correlated to risk.
The Pound to New Zealand Dollar exchange rate’s advances could slow or reverse if there is a rise in risk-sentiment in the coming sessions. However, if coronavirus fears worsen further, GBP/NZD may seen further gains.