Pound New Zealand Dollar Sliding despite Forecast-Beating UK Unemployment Rate

The Pound New Zealand Dollar (GBP/NZD) exchange rate has been unable to hold its ground this morning. Britain’s November job market was better than expected, but it was not good enough to make a notable improvement to Britain’s outlook.

The New Zealand Dollar more easily pushed the Pound lower this morning due to a brief rise in market sentiment. Still, global coronavirus uncertainty persists so this could cause mixed movement in the coming sessions.

Last Week: Coronavirus Fears Prevent GBP/NZD Advances

For most of last week, the Pound to New Zealand Dollar exchange rate benefitted from hopes that Britain’s coronavirus situation would improve as vaccines continue to be rolled out.

The New Zealand Dollar was able to avoid losses by the end of the week though. Not only did revived coronavirus jitters limit the Pound’s late-week appeal, but New Zealand’s strong outlook left it more appealing than most major peers.

Strong Chinese data, combined with fading Reserve Bank of New Zealand (RBNZ) easing bets and strong New Zealand economic expectations kept the New Zealand Dollar on the up.

Three Things to Watch For This Week

  1. New Zealand Trade Balance

New Zealand trade data from December will be published during Thursday’s Asian session. If it beats forecasts, the New Zealand outlook will be even sturdier and the New Zealand Dollar could see more gains.

  1. Coronavirus Developments

Developments in Britain’s coronavirus situation will likely be the focus for Sterling. Any signs of improvement in the infection rate could support the Pound, but fears of even longer lockdown could keep Sterling weak.

  1. New Zealand Consumer Confidence

Friday’s Asian session will see the publication of New Zealand’s January consumer confidence data from ANZ and Roy Morgan. Strong data could further boost the New Zealand Dollar’s appeal.

GBP/NZD Outlook

The coming week’s economic calendar will be quiet. This will likely leave the Pound New Zealand Dollar exchange rate reacting to shifts in coronavirus situations and market sentiment.

Josh Jeffery

Contact Josh Jeffery