Pound New Zealand Dollar Exchange Rate Floundering Near Week’s Opening Levels
Investors are hesitant to keep buying the Pound New Zealand Dollar (GBP/NZD) exchange rate higher this week, as the Pound’s (GBP) bullishness runs out of steam. The New Zealand Dollar’s (NZD) appeal is limited, but it is avoiding deeper losses against Sterling for now.
The Pound’s strength helped GBP/NZD capitalise on New Zealand Dollar weakness last week, and the pair surged from 1.9357 to 1.9667 throughout the week.
After markets opened this week, GBP/NZD briefly touched on a high of 1.9808. This was the best level for GBP/NZD all year, since late 2020. At the time of writing on Wednesday though, GBP/NZD is trending closer to the week’s opening levels again.
Some notable data will be published tomorrow. Asides from that though, market sentiment and coronavirus news will influence the Pound to New Zealand Dollar exchange rate in the coming sessions.
Pound (GBP) Exchange Rates Lack Drive despite Rise in UK Growth
Today saw the publication of Britain’s Q4 2020 growth rate results. The data beat expectations slightly, and indicated that Britain’s economy was a little more resilient to the coronavirus pandemic late last year than expected.
The forecast beating data wasn’t enough to notably boost the Pound outlook however. Britain’s economy was still one of the worst performing major economies of 2020.
Instead, the Pound’s current strength is still driven by UK coronavirus pandemic recovery hopes. After weeks of rallies, the Pound is running out of steam.
New Zealand Dollar (NZD) Exchange Rates Nurse Losses after Week of Poor Performance
Last week, a combination of New Zealand housing news and market risk-aversion left the New Zealand Dollar plummeting.
This week so far, markets are still hesitant to take risks but the bearishness around NZD has softened somewhat.
Expectations for recovery in major economies are keeping risk-sentiment afloat, and keeping the New Zealand Dollar from falling too low.
Today’s New Zealand business confidence data fell short of expectations, but this ultimately had little impact on the New Zealand Dollar’s movement.
Pound New Zealand Dollar (GBP/NZD) Exchange Rate Could Fall Lower despite UK Optimism
Much of this week’s UK and New Zealand data has been published already, with just a few stats left to round out the week.
Tomorrow’s Asian session will see the publication of New Zealand’s March consumer confidence report, from ANZ and Roy Morgan.
The European session will follow with Britain’s final March manufacturing PMI, from Markit.
While these figures are unlikely to have a big impact on the GBP/NZD outlook, surprisingly strong UK manufacturing data could help the Pound to keep trending near its recent highs.
Sterling may not have the drive to stay near its best levels for long, as optimism about Britain’s economic recovery hopes have largely been priced in already.
The New Zealand Dollar, on the other hand, may have months more bullishness left in its outlook as global economic recovery expectations continue to gradually improve and boost risk-sentiment.
For now, upcoming data, coronavirus developments and risk-sentiment will continue to drive day to day movement in the Pound New Zealand Dollar (GBP/NZD) exchange rate.