GBP/NZD Exchange Rate Rises on Positive UK Covid-19 Vaccination News
The Pound to New Zealand Dollar exchange rate held steady today ahead of Prime Minister Boris Johnson’s unveiling of the new Covid-19 lockdown exit plan. The pairing is currently fluctuating around NZ$1.92.
However, UK markets are remaining relatively cautious ahead of the announcement, with concerns that lockdown restrictions could continue with the Government eering on the side of caution.
Today also saw encouraging news that the UK Covid-19 vaccine rollout was providing a success.
The Pfizer and AstraZeneca vaccines are reducing hospital admissions by up to 85% and 94%, according to scientists from the University of Edinburgh, the University of Strathclyde, and Public Health Scotland.
Professor Aziz Sheikh, lead researcher of Scotland’s vaccine study, said:
‘These results are very encouraging and have given us great reasons to be optimistic for the future. We now have national evidence – across an entire country – that vaccination provides protection against Covid-19 hospitalisations.’
Meanwhile, UK Covid-19 cases are down by -1,138 against last week, while those in hospital has fallen by -4,922 compared to the previous week. Daily deaths are also down.
Consequently, Sterling traders are becoming more cautiously optimistic as case numbers are beginning to reflect the efficacy of lockdown measures and the vaccine rollout.
New Zealand Dollar Benefits from Positive Risk Sentiment
The New Zealand Dollar has benefited from improving risk-sentiment today, with the risk-sensitive ‘Kiwi’ benefiting from growing confidence in Covid-19 vaccine rollouts and dropping case numbers.
New Zealand has also begun its Covid-19 vaccination programme.
New Zealand health minister Ashley Bloomfield said:
‘[W]e kick off the largest immunisation programme in our history, by vaccinating the first of our border workforce, a critical step in protecting everyone in Aotearoa.’
‘We will be moving through these first few days and weeks in a measured way to make sure our systems and processes are solid.’
Consequently, this has boosted optimism in New Zealand’s economy, with the nation’s Covid-19 infection rates already being low because of stringent lockdown measures.
In New Zealand economic data, today will see the release of the latest Retail Sales for the fourth quarter, which are expected to rise by 26.7%.
As a result, we could see the NZD/GBP exchange rate head higher as the outlook for New Zealand’s economy improves.
GBP/NZD Outlook: Could Improving Risk Sentiment Drive Up the ‘Kiwi’?
Pound investors will be looking ahead to tomorrow’s release of the UK’s ILO Unemployment Rate data. Any signs of rising joblessness in the UK would prove GBP-negative.
However, if Downing Street outlines a robust plan to ease lockdown measures going forward, we will see Sterling rise on renewed optimism in Britain’s economy.
Any comments about an irreversible easing of lockdown restrictions would also boost the Pound.
The GBP/NZD exchange rate will also be driven by global risk sentiment.
If Covid-19 rates continue to fall and the outlook for the world economy improves, then the risk-sensitive ‘Kiwi’ could head higher against the Pound.