GBP/NZD Exchange Rate Struggles to Hold 2-Month-Best amid ‘Kiwi’ Strength

The Pound has been one of the most appealing major currencies on markets lately, but the Pound to New Zealand Dollar (GBP/NZD) exchange rate is struggling to sustain fresh gains this week so far. 

Sterling continues to benefit from UK coronavirus vaccine and recovery expectations. However, the New Zealand Dollar is also benefitting from recovery expectations as New Zealand’s handling of the pandemic has kept the domestic economy outperforming peers. 

Last Week: Sterling Experiences Surge in Demand 

Resilience in New Zealand’s outlook wasn’t enough to keep the Pound to New Zealand Dollar exchange rate from climbing last week. 

The Pound capitalised on market moods throughout the week. Continued optimism around Britain’s coronavirus vaccine progress compared with other major economies left the Pound one of last week’s most appealing currencies. 

New Zealand Dollar movement last week was not as resilient, but last week’s GBP/NZD gains were largely due to Pound strength. 

Three Things to Watch For This Week: 

  1. Retail Sales Results 

Markets will be focused on retail sector health for much of the next week. Britain’s January retail results on Friday could be highly influential for the Pound. Meanwhile, New Zealand’s retail sales stats due on Monday are the biggest dataset on the horizon for NZD. 

  1. UK PMI Projections 

Investors will get an idea of how Britain’s economy is performing this month after Friday’s PMI projections are published. The most influential PMI will be the services PMI, but the report as a whole has potential to influence Sterling appeal. 

  1. Coronavirus Developments 

If there are any fresh concerns in Britain’s coronavirus or vaccine outlooks, the Pound’s recent bullishness could be cut short.  

GBP/NZD Outlook 

Investors are likely to keep buying the Pound to New Zealand Dollar exchange rate unless upcoming UK data is disappointing or there are fresh concerns in Britain’s coronavirus situation. 

Josh Jeffery

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