While the Pound remains bullish today, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is struggling to climb higher. The Pound is still benefitting from hopes for Britain’s coronavirus vaccine programmes.
However, the New Zealand Dollar is also strengthening today. Higher demand for riskier trade-correlated currencies, as well as fresh losses in its rival the Australian Dollar, are making the New Zealand Dollar more appealing.
Last Week: New Zealand Dollar Resilient amid Pound Bullishness
Investors bought the Pound on rising coronavirus vaccine hopes last week. Despite this though, the Pound to New Zealand Dollar exchange rate was unable to sustain much in the way of gains.
Towards the end of last week, the New Zealand Dollar saw stronger demand as it benefitted from a slight rise in demand for riskier trade-correlated currencies, as well as weakness in rival currencies.
Signs of weakness in Australia’s economy and a more dovish Reserve Bank of Australia (RBA) have been weighing on AUD lately, making NZD more appealing in comparison.
On top of this, the New Zealand Dollar has been benefitting by signs that the Reserve Bank of New Zealand (RBNZ) is avoiding dovishness of its own.
Three Things to Watch For This Week
- New Zealand Job Market Report
The most influential event for New Zealand Dollar investors this week will be New Zealand’s Q4 2020 job market report, due during Wednesday’s Asian session. Strong data could keep the New Zealand Dollar bullish.
- UK Services PMI
Wednesday’s European session will follow with UK services and composite PMIs. The data will show how Britain’s economic activity weathered the national lockdown which begun in January.
- Bank of England (BoE) Policy Decision
The BoE will be holding its February policy decision on Thursday. If the bank is more cautious than expected on Britain’s economic outlook, the Pound could shed some of its recent strength.
With both currencies appealing lately, there could be a more notable shift in movement if upcoming data disappoints investors or the Bank of England (BoE) takes a surprising tone on Britain’s economy.