Expectations that Britain will be ramping up coronavirus vaccine rollout is helping the Pound to New Zealand Dollar (GBP/NZD) exchange rate to claw back some gains today.
The New Zealand Dollar’s appeal has also been a little softer. Investors are a little more hesitant to take risks due to central bank rate cut speculation. Lower New Zealand government bonds also weighed on NZD.
Last Week: Britain’s Third Lockdown Throttles GBP/NZD
At the beginning of last week, the UK government announced that Britain would see a third national lockdown. This was due to the surging coronavirus infection rate across the nation.
The Pound tumbled as a result. Meanwhile, the New Zealand Dollar continued to advance and took advantage of the Pound’s weakness.
Investors found the risk and trade-correlated New Zealand Dollar more appealing. This was due to rising bets of fiscal stimulus in the US, as well as a ramped up global coronavirus vaccine rollout.
Three Things to Watch For This Week
- Coronavirus Developments
The coronavirus pandemic is still the primary cause of risk-sentiment shifts. Higher vaccine hopes boost risk-sentiment but surges in infections could make markets uneasy again.
2. Bank of England (BoE) Negative Rate Speculation
Speculation is still mounting that the Bank of England (BoE) could introduce negative interest rates soon. Any upcoming comments from BoE policymakers will be closely watched.
3. UK Data
Friday will see the publication of most of this week’s influential UK data. UK growth and production stats could boost hopes of UK economic resilience if they beat forecasts.
The Pound’s current rebound may run out of steam without more to support it. However the Pound to New Zealand Dollar exchange rate could recover even further if Britain’s coronavirus situation shows any improvements.