Pound New Zealand Dollar (GBP/NZD) Exchange Rate Rallies amid Ardern’s Shock Resignation
The Pound New Zealand Dollar (GBP/NZD) exchange rate is rallying this morning, following NZ PM Jacinda Ardern announced her shock resignation.
At the time of writing, GBP/NZD is trading at around NZ$1.9324, a rise of almost 0.9% from the morning’s opening rates.
New Zealand Dollar (NZD) Sinks as PM Jacinda Arden Resigns
The New Zealand Dollar (NZD) is tanking this morning, following the news that Prime Minister Jacinda Ardern announced her surprise resignation.
Following a five-and-a-half-year tenure as Prime Minister, Ardern made the shock announcement in the early hours this morning. She will be stepping down no later than February, without seeking re-election.
Speaking to reports, Ardern stated:
‘The only interesting angle you will find is that after going on six years of some big challenges, that I am human. Politicians are human. We give all that we can, for as long as we can, and then it’s time. And for me, it’s time.’
As such, the Labour party will vote for a new leader on Sunday, with the elected leader remaining PM until the election in October.
Market reaction was initially minimal, but as we move into the European session the ‘Kiwi’ has begun to fall sharply.
Furthermore, a cautious market mood is likely weighing the risk-sensitive ‘Kiwi’ down further as fears of a global recession intensify.
Pound (GBP) Struggles amid Thin Liquidity
The Pound (GBP) is struggling for support against safer peers today, as a lack of impactful data leaves Sterling open to market sentiment.
Currently, the market mood is leaning towards caution meaning the increasingly risk-sensitive Pound is lacking appeal.
Furthermore, industrial action may be exerting further pressure on Sterling. Nurses are currently striking across the UK, with teachers to soon follow suit. Rail workers have announced further strike days, and unions have begun to consider joint action.
With the strikes having a clear impact on the UK economy, the further walkouts may be worrying investors of further economic damage.
Pound New Zealand Dollar (GBP/NZD) Exchange Rate Forecast: UK Retail Recovery to Boost GBP?
Looking ahead for the Pound (GBP), December’s retail sales figures are due to release on Friday. Analysts have forecast the monthly sales to rise from -0.4% to 0.5%, which may bring support to Sterling.
With the UK’s economy leaning on consumer consumption, the uptick will likely cheer GBP investors by showing a return to growth in retail sales.
For the New Zealand Dollar (NZD), later tonight December’s business PMI is due to print. A return to growth is forecast, with the index increasing from 47.4 to 51.
This may bring a boost to the ‘Kiwi’ by pointing towards a recovering manufacturing sector, prompting hopes for a softer recession.
Elsewhere, risk sentiment is likely to play a part. With NZD being more risk-sensitive than GBP, an upbeat market mood could pull the ‘Kiwi’ higher.