Pound New Zealand Dollar (GBP/NZD) Exchange Rate Falls Further amid Risk-On Mood
(Updated 16:45 06/01/23)
The Pound New Zealand Dollar (GBP/NZD) exchange rate continued to fall today. A return of risk appetite may have pushed the currency pair lower. A weaker US Dollar (USD) may have also led to a stronger New Zealand Dollar (NZD) today, further weighing on GBP/NZD.
Evidence of a downturn in the UK construction sector may have also pushed the exchange rate lower. December’s PMI indicated the biggest fall in the sector’s activity since May 2020 as the index slipped to 48.8.
At time of writing the GBP/NZD exchange rate is at around NZ$1.9033, which is down roughly 0.4% from this morning’s opening figures.
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Pound New Zealand Dollar (GBP/NZD) Exchange Rate Slides amid UK Housing Sector Downturn.
The Pound New Zealand Dollar (GBP/NZD) exchange rate is slipping today. Evidence of a drop in UK house prices could be pulling the currency pair lower.
Positive news from China may also be weighing on GBP/NZD today, as the country looks to reopen its borders with Hong Kong.
At time of writing the GBP/NZD exchange rate is at around NZ$1.9090, which is down 20% from this morning’s opening figures.
Pound (GBP) Falls as House Prices Tumble
The Pound (GBP) is edging lower today. Further evidence of a downturn in the UK housing market may be weighing on Sterling today.
The latest reading of the Halifax house price index saw house prices post a 1.5% month-on-month fall in December. The data confirmed the sector’s largest quarterly drop in prices since 2009. Analysts pointed to the impact of the UK’s cost-of-living crisis and September’s mini budget on the sector.
Victoria Scholar, head of investment at interactive investor, said:
‘Although house prices remain historically elevated, 11% higher than at the start of 2021, as the UK heads towards a recession, house prices are expected to soften further. The housing market looks set to struggle under the weight of a rising mortgage rates and broader inflationary pressures.’
Further rail sector strikes may also keeping pressure on the Pound today. Rail services across the UK are set to face disruption as a fresh 48-hour strike began today.
New Zealand Dollar (NZD) Ticks Higher Against Pound amid Positive News from China
The New Zealand Dollar (NZD) is slipping against several of its peers today. The currency’s correlation to the Australian Dollar may be causing losses.
Some reduced bets on the US Dollar (USD) may be helping the ‘Kiwi’ climb against the Pound, however.
Fears over soaring Covid-19 case levels in China could be pushing the New Zealand Dollar lower today. There are concerns that Chinese authorities may be underreporting the country’s death toll. The country has recorded only 22 Covid deaths since December
On the other hand, reports yesterday that China is set to reopen its borders with Hong Kong may be lending support to NZD. China is also set to end its ban on Australian coal imports which may also be preventing drastic losses for the currency.
GBP/NZD Exchange Rate Forecast: Will UK GDP Stagnation Weigh on Pound?
Looking to the coming week for the Pound, the latest retail sales figures from the British Retail Consortium (BRC) could have a mixed effect on Sterling. December’s sales volumes are expected to climb but at a slower pace amid reduced household spending.
The latest GDP figures on Friday are also set to weigh on the Pound if they print as forecast. The economy is expected to have stagnated in November, which could add to the downbeat outlook for the UK.
Further industrial action across the UK could also keep pressure on the Pound in the coming week. Tensions between the UK government and union heads remain high after the announcement of minimum service level legislation.
The New Zealand Dollar is set to see no significant data next week. Movement in the ‘Kiwi’ could be driven by any shifts in risk appetite, as well as NZD’s correlation to the Australian Dollar.
Additionally, any reports of further rises in China’s Covid-19 case levels could weigh on the New Zealand Dollar.