The Pound to New Zealand Dollar exchange rate fell today as investors become increasingly worried about the state of the UK’s coronavirus pandemic situation.
At the time of writing, the pair is currently trading around $1.8968.
Pound (GBP) Struggles for Direction against Lockdown Restriction Uncertainty
The Pound found itself struggling today as the second wave of the coronavirus pandemic continues to wreak havoc on the UK economy.
Confusion arose this morning after comments from the Prime Minister Boris Johnson suggested that the government could be “looking at the potential of relaxing some measures” before the middle of February.
The government downplayed the comments, saying that:
‘The prime minister was just making clear that we continue to look at the latest evidence in terms of the transmission of the virus, the number of people hospitalised, and the number of people who sadly go on to die.’
‘And he was making the point that ahead of 15 February, which as you know is the review point, we will look at that evidence closely, and that will inform what we may or may not be able to ease from the 15th onwards.’
With mounting fears that the third national lockdown will be extended, investors continue to worry about the state of the UK economy thus driving the Pound down.
New Zealand Dollar (NZD) Supported by Global Risk Appetite
The New Zealand Dollar was supported this morning as global risk appetite increases on hopes the coronavirus pandemic will soon be less of a threat to economies.
New Zealand’s neighbour Australia has become one of the first countries in the world to approve the rollout of Pfizer-BioNTech’s coronavirus vaccine, supporting the risk-sensitive NZD.
Australia’s Prime Minister Scott Morrison spoke on the approval saying:
‘It doesn’t mean that the masks disappear, if that is what the public health arrangements are in a particular state or territory, or the quarantine arrangements for returning into Australia will end. It will start at small-scale, it will build up and it will happen over a period of time over the course of this year.’
The New Zealand Dollar will continue to be supported if further countries approve the rollout of coronavirus vaccines[AR1] and economic recovery optimism.
Pound to New Zealand Dollar Outlook: UK Unemployment Could Push Sterling Down Further
Pound investors will focus on the UK unemployment rate data to be released tomorrow morning, which if matches consensus of 5.1% could spell further trouble for Sterling.
Pound traders will also look to any further coronavirus developments, with the Health Secretary Matt Hancock leading a press conference today at 5pm.
New Zealand Dollar investors will also focus on any global coronavirus developments, with further vaccine rollouts and falling infection rates proving positive for NZD.
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