Pound New Zealand Dollar Exchange Rate Falls amid Risk-On Trading

(Updated 16:45 13/01/22)

The Pound New Zealand Dollar (GBP/NZD) exchange rate has continued to drop today as the New Zealand Dollar (NZD) has remained buoyed by a risk-on market mood.

At time of writing the GBP/NZD exchange rate is at around $1.9951, which is down roughly -0.3% from this morning’s opening figures.

Pound New Zealand Dollar (GBP/NZD) Exchange Rate Drops amid US Dollar Sell-Off

The Pound New Zealand Dollar (GBP/NZD) exchange rate has dipped this morning amid an optimistic market mood. A mass sell-off of the US Dollar (USD) has seen investors flock to riskier currencies, whilst confidence in the Pound (GBP) has likely been undermined by continued calls for UK Prime Minister Boris Johnson’s resignation.

At time of writing the GBP/NZD exchange rate is at around $1.9964, which is down roughly -0.3% from this morning’s opening figures.

New Zealand Dollar (NZD) Boosted by Optimistic Market Mood

The New Zealand Dollar (NZD) has risen against many of its rivals today amid a risk-on trading environment. The ‘Kiwi’ has greatly benefitted from a drastic retreat by the US Dollar following figures on Wednesday showing that US inflation has hit a 39-year high.

The New Zealand Dollar could dip should the Omicron variant continue to spread. Currently the country’s Northland region has the highest case numbers, although officials in the Auckland province are worried that community cases in the region may spike within the next two to three weeks. New Zealand’s vaccination rate currently stands at 92% for full vaccination, with 95% of the country having had their first dose. January 17 will see the vaccine rolled out to children aged between 5-11.

Pound (GBP) Falls as MPs Call for PM Johnson’s Resignation

The Pound (GBP) has seen mixed fortunes today after having fallen against its riskier rivals, whilst boosted against the US Dollar (USD) following a mass sell-off. A risk-on trading mood is present in the markets this morning, whilst calls for UK Prime Minister Boris Johnson’s resignation may be further undermining confidence in Sterling.

Following allegations of multiple illegal gatherings in 10 Downing Street, Johnson has faced a wave of calls to resign from opposition MPs and members of his own party. Johnson faced a difficult session in the UK’s House of Commons on Wednesday, whilst repeatedly stating that MPs should await the findings of an internal inquiry. As of Thursday morning, Johnson has cancelled his public appearances after a family member tested positive for Covid-19.

The Pound (GBP) could see a further dip following news that England’s deputy chief medical officer Johnathan Van-Tam will be stepping down from his position at the end of March. France’s lifting of its ban on vaccinated UK travellers today could help limit losses for Sterling however.

Reports from the Recruitment and Employment Confederation (REC) indicating that job vacancies in the UK grew at their slowest pace for 8 months could also help boost GBP. Evidence of a consistently tight labour market could fuel speculative bets by investors on an early interest rate hike by the Bank of England (BoE).

GBP/NZD Forecast: Will Investors React to November GDP Figures?

Looking ahead to the rest of the week, Friday brings multiple significant data releases for the UK. A forecast widening of the country’s trade deficit could see the Pound fall, although an expected rise in GDP figures for November may help underpin these losses. Investors may pay little attention to these GDP figures however as it is unlikely that they will reflect the full impact of the Omicron variant.

With no further data for the New Zealand Dollar this week, the currency’s movements are likely to be driven by market risk appetite and Covid-19 cases numbers across the country.

Gareth Monk

Contact Gareth Monk


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