After surging to new 2021 highs yesterday, the Pound New Zealand Dollar (GBP/NZD) exchange rate has been falling back again.
Recovering market appetite for risk-correlated currencies has boosted the New Zealand Dollar since last night. While the New Zealand Dollar is on track to see losses in March overall, investors adjusted positions ahead of the end of the month, as New Zealand’s domestic outlook is still generally optimistic.
Last Week: Coronavirus Jitters Cause Risk-Off Rush
Fresh concerns that a ‘third wave’ of coronavirus infections could surge around the world dampened market sentiment last week.
This, as well as shock volatility in the Turkish Lira (TRY), made investors hesitant to hold onto the risk and trade-correlated New Zealand Dollar last week. The ‘Kiwi’ plummeted towards the end of the week.
Sterling capitalised on the New Zealand Dollar’s losses due to optimism around Britain’s economic outlook. GBP/NZD ended last week near its best levels all year as a result.
Three Things to Watch For This Week:
- New Zealand Confidence Results
New Zealand’s March business confidence stats from ANZ will be published tomorrow, and consumer confidence will follow during Thursday’s Asian session. These are the most influential figures of the week for NZD.
- UK Growth Rate Report
The biggest data for GBP/NZD investors this week is Britain’s final Q4 growth rate report, due tomorrow. Surprising UK growth data could influence the market’s optimism around Britain’s economic recovery outlook.
- UK Manufacturing PMI
Britain’s final March manufacturing PMI from Markit will be published on Thursday. If Britain’s manufacturing sector beat projections over the past month, markets may buy the Pound on UK recovery hopes.
If the recent risk-off movement has cooled for now, the Pound to New Zealand Dollar exchange rate will struggle to return to its best levels. The Pound outlook could be influenced by surprising UK data in the coming sessions.