The Pound New Zealand Dollar (GBP NZD) exchange rate held close to its staring levels on Wednesday morning, despite the UK government raising the UK threat level to critical last night.
The move comes after the deadly terror attack in Manchester on Monday night, in which 22 people were killed and scores more injured at a music concert in Manchester arena.
This is the first time the threat level had been raised to critical in 10 year and will see 5,000 British troops deployed to help support police at major events around the country.
However, the news appeared to have little impact on financial markets, with Sterling remaining largely unchanged as all UK political parties suspended their campaigns until further notice.
This comes after GBP NZD plummeted at the start of the week as a YouGov poll revealed that Theresa May’s lead over Labour had fallen to just 9 points following the release of the Conservative manifesto last week.
Potential voters appeared particularly concerned over the Tories’ plans to alter social care for the elderly, with a proposal for those with over £100,000 in assets to pay for care in their own homes, a policy which critics branded a ‘dementia tax’.
Meanwhile the New Zealand Dollar struggled to push higher this morning after Moody’s downgraded China’s credit rating.
In a statement Moody’s warned that China’s financial strength is likely to fade over the coming years thanks to a slowing economy and mounting debt.
This was a blow to the ‘Kiwi’ as it caused concerns that a slowdown in China could negatively impact New Zealand’s trade as the Chinese market accounts for around 17% of all exports.
Looking ahead, the GBP NZD exchange rate may soften on Thursday with the release of the UK’s latest GDP estimate, which is expected to confirm that growth slowed from 0.7% to 0.3% in the first quarter of 2017.
Meanwhile, a lull in domestic data may hinder the New Zealand Dollar’s chances of advancing for the remainder of the week, with the ‘Kiwi’ likely to be reliant upon an uptick in global risk appetite if it is to see any further gains.
Current Interbank Exchange Rates
At the time of writing the GBP NZD exchange rate was trending around 1.8451 and the NZD GBP exchange rate was trending around 0.5420.
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