The Pound New Zealand Dollar (GBP NZD) exchange rate is currently holding steady ahead of a possible vote by the House of Lords to amend the government’s Article 50 legislation.
Peers are reportedly planning to call for MPs to be giving a ‘meaningful vote’ on the terms of the government’s final Brexit deal, with the option to veto it and ask for the PM to renegotiate a new deal.
Markets are hopeful that such a deal would prevent Theresa May pursuing her plans for a hard Brexit as many MPs oppose such an approach.
This will be the bill’s second defeat in the House of Lords after peers voted to amend the legislation to protect the rights of EU citizens living in the UK last week. However they could both be rejected by the Commons when the bill returns to the lower house next week.
Meanwhile the New Zealand Dollar suffered this afternoon following a dramatic drop in dairy prices at the latest global dairy auction.
Prices fell by 6.3% at the latest auction, which takes place fortnightly. This is the second consecutive drop after prices fell by 3.2% in mid-February, prompting concerns that it could become a trend.
The largest fall came from Skim and Whole milk powder, which fell by 15.5% and 12.4% respectively, offsetting a healthy 8.4% rise in butter milk powder prices.
With dairy products accounting for over 25% of exports in New Zealand the ‘Kiwi’ was understandably subdued by the news.
Looking ahead investors will be closely watching Philip Hammond’s budget speech tomorrow afternoon as they wait to see if the UK Chancellor will discuss his plans to reinvigorate business investment, after the uncertainty of Brexit caused firms to drastically cuts spending last year.
Meanwhile expectations that New Zealand’s Manufacturing Production may have declined in the last three months of 2016 could weigh on the New Zealand Dollar later this evening.
However GBP NZD may still struggle to make any major headway over the coming days as Theresa May’s plans to trigger Article 50 by the end of the month is likely to leave traders reluctant to invest in Sterling.
Current Interbank Exchange Rates
At the time of writing the GBP NZD exchange rate was trending around 1.74 and the NZD GBP exchange rate was trending around 0.57.
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