Pound New Zealand Weekly Forecast: GBP/NZD Exchange Rate to Remain Subdued?

The Pound New Zealand (GBP/NZD) exchange rate fluctuated last week, bouncing off a one-year low and trading sideways overall amid a shifting market mood.

So far this week, GBP/NZD has slumped by over 1%, primarily due to a hawkish shift from the Reserve Bank of Australia (RBA).

What’s Been Happening: GBP/NZD Wavers amid Volatile Market Mood

After a muted start to the week, the New Zealand Dollar (NZD) surged higher against the Pound (GBP) on Tuesday as an upbeat market mood boosted the risk-sensitive ‘Kiwi’.

A sharp and unexpected improvement in New Zealand business confidence also pushed NZD higher. The business outlook index jumped from -51.8 to -41.9 as worries about Omicron receded.

However, poor Chinese data soured the sentiment in Asian markets, causing the ‘Kiwi’ to relinquish its gains towards the end of the week.

Meanwhile, the Pound struggled against the ‘Kiwi’, despite a positive tone around peace talks in Ukraine, as cost-of-living concerns weighed on the UK currency.

Sterling regained some ground towards the end of the week after the UK’s final GDP growth rate beat previous estimates.

GBP/NZD then wavered on ‘Bleak Friday’. Rising UK bills weighed on the Pound while the ‘Kiwi’ faced risk-off headwinds.

Three Things to Watch Out for This Week

  1. Russia-Ukraine War

The ongoing invasion continues to cause volatility in markets, so we could see GBP/NZD waver.

  1. China Services PMI

NZD is sensitive to Chinese economic data, so China’s services PMI could cause some movement. If service-sector activity contracts, as is expected, the ‘Kiwi’ could slip.

  1. UK Cost-of-Living Crisis

The squeeze on real incomes in the UK has hurt Sterling in recent weeks. As it’s likely to remain in the headlines it could continue to weigh on GBP in the coming days.

GBP/NZD Forecast

Looking ahead, the remainder of the week could bring more volatility. Data on both sides is thin on the ground, so the Pound New Zealand Dollar pair may trade primarily on risk sentiment and domestic news. However, with the war in Ukraine and the UK cost-of-living crisis, Sterling could continue its longer-term downtrend. 

Samuel Birnie

Contact Samuel Birnie

Do Not Sell My Personal Information