Pound New Zealand Dollar (GBP/NZD) Exchange Rate Muted as Johnson Meets with his New Cabinet
The Pound Sterling New Zealand Dollar (GBP/NZD) exchange rate remained muted and the pairing is currently trading at an inter-bank rate of NZ$1.8659.
This morning, the Pound remained muted as new Prime Minister Boris Johnson met with his newly formed Cabinet for the first time.
More than half of Theresa May’s old Cabinet, including Johnson’s leadership rival Jeremy Hunt, either quit or were sacked.
New appointments of Ministers include Sajid Javid as Chancellor, Priti Patel as Home Secretary and Dominic Raab as Foreign Secretary.
However, the strong Brexiteer presence did little to rattle Sterling which remained flat against the ‘Kiwi’.
Johnson’s election provided the Pound with temporary stability after months of Brexit uncertainty.
Sterling (GBP) Flat as Markets Price in Johnson’s Win
Prime Minister Boris Johnson’s victory was largely priced in by markets as he vowed to leave the European Union at the end of October, with or without a deal.
Speaking to his new Cabinet, Johnson said:
‘As you all know we have a momentous task ahead of us, at a pivotal moment in our country’s history.
‘We are now committed, all of us, to leaving the European Union on October 31 or indeed earlier – no ifs, no buts.
‘But we are not going to wait until October 31 to get on with a fantastic new agenda for our country, and that means delivering the priorities of the people.’
However, Sterling has shed 5% of its value since May and commenting on the outlook for the Pound, Currencies Analyst at ACLS Global, Marshall Gittler said:
‘Sentiment towards the Pound doesn’t seem to have improved – on the contrary, three-month risk reversals continue to decline, showing that people are getting increasingly negative on the currency.
‘So I believe this is just a temporary respite and I remain long-term bearish on GBP.’
New Zealand Dollar (NZD) Muted as US-China Face-to-Face Talks Scheduled
On Wednesday reports revealed that US negotiators are scheduled to meet Chinese officials in Shanghai next week.
According to the White House, face-to-face meetings will continue from the 30 July.
US Trade Representative Robert Lighthizer and Treasury Secretary Steven Mnuchin are set to meet Chinese Vice-Premier Liu He.
Speaking to reporters at the White House on Wednesday, Mnuchin said:
‘There’ll be a few more meetings before we get a deal done.
‘I wouldn’t expect that we’ll resolve all the issues. But the fact that we’re back at the table at the direction of the two presidents is important.’
However, despite a rise in risk appetite the risk-sensitive ‘Kiwi’ was left muted against the Pound.
Pound New Zealand Dollar Outlook: Will Trade Talk Optimism Buoy NZD?
Looking ahead, the New Zealand Dollar (NZD) could rise against Sterling (GBP) following further reports about the upcoming face-to-face talks between the US and China.
If reports are optimistic about next week’s expected progress, it could provide an upswing of support for the risk-sensitive New Zealand Dollar.
Meanwhile, it is likely the focus will shift to Boris Johnson and whether he will stick to his rhetoric about getting more concessions from the EU.
If there are signs Johnson may be successful in persuading the EU to agree to a new Brexit deal, the Pound New Zealand Dollar (GBP/NZD) exchange rate could rise.