For much of the week the Pound New Zealand Dollar (GBP/NZD) exchange rate has plummeted due to a weakness in the Pound and a risk-on mood allowing the New Zealand Dollar to push higher.
Heading into the weekend however, the Pound appears to be regaining traction as a risk-off mood causes the New Zealand Dollar to lose its gains, at the time of writing the GBP/NZD exchange rate is trading at around NZ$1.9256.
Pound (GBP) Exchange Rates Gaining on Hopeful UK Economic Recovery
After a disappointing week for the Pound, the hopes of the UK recovering enough from the coronavirus pandemic so international travel can reopen for summer has caused the currency to start rebounding heading into the weekend.
TUI boss Friedrich Joussen was optimistic surrounding the reopening of travel for ‘summer holidays’ saying he expected 75% of the TUI schedule to go ahead.
Furthermore, new data from the Office for National Statistics (ONS) that has shown infections of coronavirus have dropped sharply to their lowest level since September 2020. As reported by the ONS:
‘Northwest England had the highest proportion of people of any region in England likely to test positive: around one in 260 whereas the Southwest England had the lowest estimate: around one in 1,150.’
As a result Pound investors are increasingly optimistic surrounding England’s lockdown easing in the coming months and the recovery of the economy.
New Zealand Dollar (NZD) Exchange Rate Dips as US Dollar Rebounds
Though the New Zealand Dollar has had a positive week following dovish comments from the Federal Reserve, a rebound in the US Dollar today has caused the currency to falter.
For much of the week the New Zealand Dollar had capitalised with a risk-on mood as the safe-haven US Dollar plunged, though those gains are beginning to disappear.
Though the most recent Business PMI from New Zealand exceeded expectations and indication record growth, allowing a limit in losses.
The New Zealand Dollar is hoping to hold onto at least some of those gains heading into the weekend, as a slew of data from New Zealand is expected to drive movement next week.
Pound New Zealand Dollar (GBP/NZD) Exchange Rate Outlook: Inflation Data in Focus
Next week will see key inflation data released from both the UK and New Zealand mid-week, which will give an insight into how both economies are recovering from the coronavirus pandemic.
Other UK data releasing next week includes employment change and retail sales which could also influence movement.
The GBP/NZD exchange rate will continue to be driven by any further coronavirus developments over the weekend, as Pound investors will keep an eye on the cluster of South African variant cases of the virus to see if they can be contained.