This morning’s UK manufacturing PMI report beat forecasts. This, combined with optimistic comments from UK and EU officials over Brexit talks, are keeping the Pound buoyant today and helping the GBP NZD exchange rate to recover from its worst levels all year.
The New Zealand Dollar is recoiling slightly after weeks of strong performance. This is making it easier for GBP/NZD to recover.
Last Week: New Zealand Rally Capitalised on Brexit Jitters
The New Zealand Dollar has been surging in recent weeks.
Speculation that the Reserve Bank of New Zealand (RBNZ) will not use negative interest rates any time soon after all, as well as signs that the bank could focus on house prices, have led to a repricing of RBNZ expectations. This caused NZD to strengthen considerably.
The New Zealand Dollar was able to push GBP/NZD lower last week as no-deal Brexit jitters weighed on the Pound’s own appeal. GBP/NZD touched its lowest levels in over a year last week as a result.
Three Things to Watch For This Week
- Brexit Developments
With just a month until the end of the Brexit transition period, UK-EU Brexit negotiations will be the biggest focus for the Pound going forward.
2. New Zealand Trade Stats
New Zealand’s import and export prices, as well as terms of trade data, will be published tomorrow. New Zealand is a trade-heavy nation, so strong data could boost NZD.
3. UK Services PMI
PMIs from Britain’s key services sector will be published on Thursday. They will give markets a better idea of how Britain’s economy was hit by the second coronavirus lockdown over the past month.
The Pound to New Zealand Dollar exchange rate may continue to recover from recent yearly lows if Brexit hopes and UK data boost the Pound while the New Zealand Dollar rally runs out of steam.