The Pound New Zealand Dollar (NZD CAD) exchange rate began to slide this morning following a rise of nearly two cents yesterday evening, after the UK Prime Minister Theresa May hinted that a transitional agreement with the EU may be on the cards.
Pound New Zealand Dollar (GBP NZD) Bolstered by May Speech
Speaking at the annual CBI conference, the Prime Minister said that she was seeking to bring an end to some of the uncertainty of ‘Brexit’, hinting that the British government may seek a transitional arrangement with the EU.
This would allow the UK to retain access to the single market for a set period of time after ‘Brexit’ while a new UK-EU trade deal was negotiated.
Markets reacted positively to that news as they have long feared the impact that losing access to the single market would have on British businesses and the UK economy.
Pound Slides as Britain Set to Borrow More than Planned in 2016
The Pound New Zealand exchange rate took a blow this morning as markets reacted to the latest Public Sector Borrowing report, which saw figures improve from £9.2billion to £4.3billion in October, beating predictions that it would only drop to £6.0billion.
Despite the better than expected figures the Pound slid as it became clear that Britain would overshoot the £55billion target in March’s budget. Analysts now predict that the UK will borrow around £68billion this financial year as Martin Beck, senior economic advisor to the EY ITEM Club, explained;
‘This still leaves the Government behind schedule in terms of achieving the OBR’s full year forecast. If this trend continues over the remaining five months of the year then borrowing would overshoot by around £11bn.’
GBP NZD Forecast: UK Autumn Statement to be Released Tomorrow
The Pound to New Zealand Dollar exchange rate may become volatile on Wednesday ahead of the release of the UK’s Autumn Statement.
Despite the improvement in public sector borrowing last month, the statement is predicted to show a £100bilion deficit in public finances as the new Chancellor, Philip Hammond alters the target of balancing the nation’s budget by 2020 to help with the financial pressures of ‘Brexit’.
Meanwhile the NZD GBP exchange rate may rise further on Thursday should of New Zealand’s latest Trade Balance figures impress.
Current Interbank Exchange Rates
At the time of writing the GBP NZD exchange rate was trending around 1.76 and the NZD GBP exchange rate was trending around 0.56.
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