The Pound New Zealand Dollar exchange rate has dropped today due to fresh Brexit concerns, which may further weaken GBP in the future.
The New Zealand Dollar has climbed along with national visitor numbers, but a key multi-national trade deal remains a potential drag on any NZD rallies.
Pound New Zealand Dollar Demand Crashes as Article 50 Debate Gets Underway
The Pound has dropped -0.3% against the New Zealand Dollar during trading today, in response to fresh uncertainty over how the UK’s exit from the EU will unfold.
With MPs debating the Article 50 bill, a short piece of legislation that must be approved to start Brexit properly, concerns have been that the allocated debating period may not be nearly long enough to hear or decide upon all of the proposed amendments.
In New Zealand, the latest news has shown that visitor arrivals on the year in December rose marginally from 11% to 11.1%, while alarm has been caused by the US formally announcing that it is no longer part of the Trans-Pacific Partnership (TPP).
Pound Sterling Predicted to Weaken if Article 50 Bill Faces Sustained Opposition
The Pound may find itself sliding further against the New Zealand Dollar over the coming weeks, depending on how easy the passage of the Article 50 bill is through the House of Commons and the House of Lords.
While it is now accepted that Brexit cannot be stopped, MPs are still expected to try and amend the bill so that it includes clauses on remaining members of certain EU institutions as well as provide more clarity about how Brexit negotiations are faring.
If these amendments fail to make it into the final draft, especially the less-controversial ones that simply ask for a clearer picture, then MPs could vote against the bill and frustrate the Government’s timetable.
This might boost the Pound, but given that it would only amplify existing uncertainty, Sterling could instead slide due to fears about future actions in starting Brexit.
New Zealand Dollar Demand Likely to Remain Low if TPP Deal Fails
Looking ahead, the value of the New Zealand Dollar is closely tied to the fate of the Trans-Pacific Partnership (TPP) trade deal.
Should the deal fall apart now that the US is officially out of membership, the New Zealand Dollar is likely to suffer a temporary but severe devaluation, which will significantly worsen its performance against the Pound.
If by some diplomatic miracle the TPP deal stays intact against the odds, however, then the NZD could well rally against Sterling, given that it will mean renewed hopes of a multinational trade deal going ahead after so many years of work.
Recent Interbank GBP NZD Exchange Rates
At the time of writing, the Pound New Zealand Dollar (GBP NZD) exchange rate was trending in the region of 1.70 and the New Zealand Dollar Pound (NZD GBP) exchange rate was trending in the region of 0.58.
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