The GBP/NZD Exchange rate Stable Amidst Lull in Data
The Pound New Zealand Dollar (GBP/NZD) exchange rate was mostly rangebound this morning as investors awaited fresh catalyst for movement.
At the time of writing the GBP/NZD exchange rate is virtually unchanged this morning , leaving the pairing close to a two-week low.
Renewed Political Uncertainty to Rock the Pound (GBP)?
The Pound New Zealand Dollar (GBP/NZD) exchange rate looks to face increased volatility in the coming weeks as the UK currency faces fresh political uncertainty.
While Sterling is certainly no stranger to political uncertainty, things are likely to be kicked up a notch on Friday as Theresa May steps down as leader of the Conservative party and the race to replace her official begins.
What comes next is likely to be weeks of political jockeying by leadership candidates with the Pound likely to fluctuate significantly in the subsequent uncertainty, which could last over a month due to the large number of candidates in the running.
GBP investors are likely to be particularly focused on the performance of the hardline Brexiteers in the running as markets fear the risks of a no-deal Brexit are likely to surge if one should become the next PM.
In fact one candidate, former Brexit secretary Dominic Raab has already suggested that if he became PM that he could close down Parliament to force through a no-deal Brexit in October, the prospect of which will unsurprisingly unnerve many GBP investors.
How Will Deteriorating Global Trade Impact the New Zealand Dollar?
Meanwhile the outlook for the New Zealand Dollar (NZD) appears equally unclear, with the risk sensitive currency facing headwinds as global trade tensions continue to flare.
This of course is focused on the US-China trade dispute, which has seen the two powers hike tariffs on one another in recent weeks following the breakdown in trade talks.
However potentially even more worrying for NZD investors is that US is now also about to impose tariffs on Mexico as well, as it seeks to pressure the Mexican government into doing more to stem illegal immigration into the US.
This is particularly worrying for markets as it suggests that the US may still be willing to open new trade dispute while it is still in the middle of a trade war with China.