The Pound (GBP) has shed its earlier gains against the New Zealand Dollar (NZD) today, falling to an exchange rate of NZ1.9320.
While not much lower than the morning’s trading rate, this is still a noticeable deterioration caused by Brexit worries.
The latest Brexit news has seen groups like the TUC and Confederation of British Industry (CBI) demand a faster, clearer Brexit process.
Stressing how urgently solid progress in Brexit talks is needed, a collective letter from concerned groups has read:
‘Decisions will be needed in June and October to finalise the withdrawal agreement and the transitional arrangement, and put economic interests and people’s jobs, rights and livelihoods first.
The cost of disagreement between the UK and the EU would be dire for firms, workers and the communities where they live.’
(Last updated 27th June, 2018)
Fresh Remarks from Hawkish BoE Policymaker could Cause GBP/NZD Exchange Rate Rise
The Pound (GBP) has risen by 0.3% against the New Zealand Dollar (NZD) today, hitting an exchange rate of NZ$1.9356.
This favourable trading comes ahead of a speech from Bank of England (BoE) policymaker Andy Haldane, who voted for higher interest rates last week.
Mr Haldane broke from a long-running pattern of backing interest rate freezes, so his remarks on Thursday will be under close scrutiny from GBP traders.
If he pushes for a near-term BoE interest rate hike, potentially as soon as August as some expect, then Pound Sterling could advance against the New Zealand Dollar.
Risk of GBP/NZD Exchange Rate Losses on UK GDP Slowdown
Although Thursday’s BoE speech could lead to the Pound (GBP) rising against the New Zealand Dollar (NZD), there is a risk of Sterling facing headwinds on Friday.
These will come from the finalised GDP growth rate figures for Q1 2018, which are expected to confirm that economic activity slowed at the start of the year.
Although this would just be a confirmation of what currency traders already suspect, it could still devalue the Pound and lead to a late-week loss in the GBP/NZD pairing.
New Zealand Dollar to Pound Exchange Rate Forecast: Will Falling Business Confidence Drag NZD/GBP Lower?
Looking to the future, the next major economic data out of New Zealand isn’t due until the coming Monday, when a Q2 business confidence reading will come out.
This measurement of economic optimism previously showed an -11% drop during the first quarter of 2018 and could disappoint traders with another negative printing.
Business confidence in New Zealand has taken a hit since the change of government in 2017, when the longstanding National leadership was replaced with a coalition.
A larger negative figure or no change to the reading would suggest that businesses in New Zealand are still wary of the new government and could weaken the NZD.
Extended NZD/GBP Exchange Rate Prediction: Could Dairy Price Data Spark New Zealand Dollar Recovery?
Beyond next Monday’s NZ business confidence reading, the New Zealand Dollar to Pound (NZD/GBP) exchange rate could also be affected by next Tuesday’s dairy news.
The afternoon will see the release of a key measure of global dairy prices, the Global Dairy Trade price index.
The last reading proved disappointing, showing a -1.2% drop in dairy prices on 19th June.
If the upcoming reading shows a converse rise in dairy prices then the New Zealand Dollar might increase in value, as this would be good news for NZ dairy exporters.
On the other hand, another decline in prices would make it three bad sessions in a row, which could lead to the New Zealand Dollar falling sharply against the Pound.
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