The Pound New Zealand Dollar exchange rate has fallen by around -0.5% today and looks set to worsen in the medium-term, unless Chancellor Philip Hammond delivers some especially good news in the upcoming UK budget.
Future movement for the New Zealand Dollar is tied to how the nation’s central bank, the Reserve Bank of New Zealand (RBNZ), handles an upcoming change in management.
GBP NZD Weakness Follows Commons Defeat for Article 50 Bill Amendments
The Pound has dropped noticeably against the New Zealand Dollar today, following a disappointing first round of Article 50 bill amendment proposals in the House of Commons.
As well as a Labour proposal to have the Prime Minister regularly update MPs on Brexit negotiations being blocked, another to more closely involve devolved leaders in the process was also voted down by a majority.
Debates over amendments continue, which may result in Pound-boosting modifications to the Brexit bill; conversely, a lack of change at all to the bill is expected to further weaken the GBP NZD exchange rate.
New Zealand news has recently focused on RBNZ Governor Graeme Wheeler, who has announced that he will end his term in September, leaving the door open to a successor in 2018.
Pound Sterling New Zealand Dollar Slump Forecast on March Budget and Forecast Austerity
The Pound is expected to drop considerably against the New Zealand Dollar on the delivery of the March budget, given that present forecasts are for a rise in taxes and more cuts to already depleted public services.
A particularly gloomy Institute for Fiscal Studies (IFS) outlook has offered more concerning news on this front, stating;
‘Even on central forecasts that is going to require extending austerity towards the mid-2020s. If the economy does less well than hoped then we may see yet another set of fiscal rules consigned to the dustbin’.
New Zealand Dollar Demand Linked to New RBNZ Governor’s Stance on Monetary Policy
An incoming development that could impact the New Zealand Dollar will be the appointment of Wheeler’s successor, Grant Spencer, as temporary Governor.
While Spencer may not be the final permanent Governor in 2018, he will nonetheless run the RBNZ for a time and could implement different policy measures to Wheeler, which will likely shift sentiment in the New Zealand Dollar’s value.
Even ahead of Spencer’s upgrade to temporary Governor, his actions are likely to come into focus, as it is now accepted that he will be the interim RBNZ head later this year.
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 1.69 and the New Zealand Dollar Pound (NZD GBP) exchange rate was trending in the region of 0.58.
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