For the UK, a potential conflict between the UK and US could weaken future demand for the Pound despite the Prime Minister’s industrial strategy.
New Zealand Dollar interest may also come under fire in the near-term, if a key multinational trade deal falls apart in the wake of Donald Trump’s ascension to the US presidency.
GBP NZD Exchange Rate Strengthens as PM Delivers UK ‘Industrial Strategy’ Plan
The Pound has risen notably against the New Zealand Dollar today, advancing by 0.6% after a previous week of high volatility for Sterling.
The latest positive influence has been Prime Minister Theresa May, who provoked high volatility last week by announcing that the UK would be leaving the EU single market as part of Brexit.
More recently, May has been outlining what plans are for the UK’s industrial activities in the future, which include a more reactionary approach to issues instead of simply setting down policies and waiting and seeing if they actually work.
For the New Zealand Dollar, input has come from the US, where support has been triggered by US President Donald Trump softening the US Dollar with an immediate quarrel with national media.
Less helpful for the NZD has been the news that Trump is planning to take the US out of the Trans-Pacific Partnership (TPP) as part of his first executive actions; something that has put the future of the trade deal into serious question.
GBP NZD Exchange Rate Predicted to Worsen if UK-US Trade Relations Break Down
The UK stands on the edge of an economic precipice at present and it remains to be seen whether it the Pound will remain standing or tumble in the future due to outside pressures.
One of the biggest outside threats to the UK is President Trump, whose anti-globalisation and pro-US rhetoric could lead the UK and US into conflict in the future.
While Trump and his representatives have spoken positively of a UK-US trade relationship being forged ‘quickly’, concerns persist that the UK government could cut corporation tax after leaving the EU. This boost in competitiveness could bring the two nations into conflict and spark a Pound-weakening trade war.
New Zealand Dollar Forecast to Fall if US Withdrawal from TPP Causes Deal Collapse
Interest in the New Zealand Dollar may drop off sharply in the foreseeable future, assuming that the Trans-Pacific Partnership (TPP) falls apart due to the absence of US membership.
Unless dedicated trading officials from member nations are able to salvage the deal, the New Zealand Dollar may drop off heavily on the termination of a historic trade agreement that was only signed in the first place at the start of 2016.
If, on the other hand, officials managed to pull out all the stops and make TPP a success without the US, then hope is likely to be rekindled and the New Zealand Dollar could rally strongly on such an expected piece of good news.
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 1.73 and the New Zealand Dollar Pound (NZD GBP) exchange rate was trending in the region of 0.57.
Comments are closed.