The Pound to New Zealand Dollar (GBP/NZD) exchange rate has weakened since markets opened this morning as a more upbeat market mood strengthens the appeal of the ‘Kiwi.’
The Pound could gain from a resurgence later in the morning if the UK’s construction PMI impresses investors.
Last Week: Dovish BoE Commentary causes Pound to Stumble
The Pound had been supported at the start of last week as optimism surrounding the UK’s economic reopening and a more cautious market mood strengthened Sterling sentiment.
However dovish commentary from the Bank of England’s (BoE) Andy Haldane and Governor Bailey paired with a contraction in UK GDP during Q1 caused the Pound to fall towards the end of the week.
A quieter economic week for the New Zealand Dollar saw movement in the currency driven by the global market mood which remained cautious for much of the week as a surge in global coronavirus cases worried markets.
The GBP/NZD pairing ended the week trending lower as the unemployment rate in the US rose and thus bolstered the appeal of the New Zealand Dollar.
Three Things to Watch for This Week
- Coronavirus Developments
The GBP/NZD pairing will continue to be driven by any further coronavirus developments in the coming days, whilst Prime Minister Boris Johnson last night announced that the final UK lockdown easing ‘should’ go ahead on the 19th July some experts warn of the implications the decision may have.
- Preliminary ANZ Business Confidence
Mid-week will see the release of the latest preliminary ANZ business confidence index from New Zealand for July. The ‘Kiwi’ could find some support if the index rises to -0.1% as forecast.
- UK GDP Data
Pound investors will keep an eye on the UK’s GDP reading for May nearer the end of the week. Much of the UK’s economy reopened during May and investors will be hoping for a stronger GDP reading from the country.
A quieter economic week for the Pound New Zealand Dollar exchange rate could see movement driven more by the global market mood for the ‘Kiwi’ for much of the week. More so, coronavirus developments may be the main driver of movement in Pound exchange rates until the latest UK GDP reading at the end of the week.