GBP/NZD Exchange Rate Sinks, Risk-On Markets Buoy ‘Kiwi’
The Pound New Zealand Dollar (GBP/NZD) exchange rate fell by -0.4% today, with the pairing currently trading around NZ$2.016 as growing US-China ‘phase one’ trade deal optimism provides a boost for the risk-sensitive ‘Kiwi’.
John Studzinski, Vice Chairman at the investment management firm, Pimco, commented:
‘There are obviously issues remaining about agricultural purchase targets, forced technology [transfer] and broader enforcement issues. But I think the view would be to try to resolve something… by the beginning of December and sign it before Christmas.’
The New Zealand Dollar (NZD) has also continued to benefit from renewed confidence in the New Zealand economy following Sunday’s release of the NZ Performance of Services Index, which rose from 54.5 to 55.4.
Yesterday also saw optimism in the economy increase following the release of the NZ Producer Price Index for the third-quarter, which beat forecasts and rose to 0.9%.
However, with China being New Zealand’s largest trading partner and US-China trade relations improving, market risk-on sentiment has propped up the NZD/GBP exchange rate today.
GBP/NZD Exchange Rate Sinks, Markets Brace for Johnson-Corbyn Debate
The Pound (GBP) fell against the ‘Kiwi’ today as markets brace for the head-to-head TV election debate between Prime Minister Boris Johnson and Labour leader Jeremy Corbyn later on this evening.
With Boris Johnson being perceived to have the most at stake in tonight’s televised debate, any signs of the Tory’s favourability ratings slipping in the polls could further weaken the GBP/NZD exchange rate.
In UK economic data, today saw the release of November’s CBI industrial orders survey, which fell by -26 and confirmed investors’ fears of a slowing UK economy.
Howard Archer, Chief Economic Adviser at the EY Item Club, said:
‘The report does little to inspire confidence that better times lie just around the corner for manufacturing sector. The November CBI survey still largely indicates a manufacturing sector struggling in the face of soft domestic and foreign demand, and hampered by Brexit, domestic political and global economic uncertainties.’
GBP/NZD Outlook: Could UK Political Uncertainty Further Weaken the Pound This Week?
Pound (GBP) traders will be looking ahead to tomorrow’s UK Inflation Report Hearings, with any dovish comments from the Bank of England (BoE) weighing on market confidence in Sterling.
US-China trade developments will remain in focus this week, with the ‘Kiwi’ benefiting from any further signs of a US-China ‘phase one’ trade deal being on the horizon.
New Zealand Dollar (NZD) investors will also be looking ahead to Thursday’s publication of New Zealand’s credit card spending figure for October, which is expected to improve from 4.8% to 5.5%.
The GBP/NZD exchange rate will continue to be driven by UK political developments, with any signs of Jeremy Corbyn gaining favourability in this evening’s head-to-head with Boris Johnson likely throwing the UK into a state of political uncertainty, and further weakening the Pound.