The Pound to New Zealand Dollar (GBP/NZD) exchange rate has found itself heading higher since markets opened this morning as a sour market mood does nothing to support NZD exchange rates.
The New Zealand Dollar could be open to further losses today as a lack of notable data paired with a weakening market mood would prove negative for the risk-correlated currency.
Last Week: Sterling Stumbles on Back of Lacklustre Economic Data
At the start of last week the Pound had found itself volatile against many of the majors as the UK’s ‘freedom day’ was largely ignored by investors.
A quieter economic calendar for both the UK and New Zealand saw movement driven more by domestic coronavirus developments in the UK and the strength of the global market mood for the New Zealand Dollar.
The GBP/NZD pairing ended the week trending lower as lacklustre retail sales and flash PMI’s from the UK paired with a strengthening New Zealand Dollar caused the Pound to stumble.
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, as New Zealand’s closest partner Australia continues to record daily coronavirus cases.
2. Federal Reserve Interest Rate Decision
Mid-week will see the latest interest rate decision from the Federal Reserve, a more hawkish stance from the Fed could see a further sell-off in the New Zealand Dollar.
3. ANZ Business Confidence
New Zealand Dollar investors will keep an eye on the latest ANZ business confidence index on Thursday which is forecast to have risen to 1.2, a figure which could provide much needed support to the ‘Kiwi’.
A quiet economic week for both the Pound and New Zealand Dollar will see movement largely driven by global coronavirus developments and the mood of global markets for much of the week. The latest interest rate decision from the Fed could also be a catalyst for movement mid-week.