Pound Sterling New Zealand Dollar (GBP/NZD) Exchange Rate Muted as Voters Head to the Polls
The Pound Sterling New Zealand Dollar (GBP/NZD) exchange rate was left flat as the UK began voting on Election Day. This left the pairing trading at around NZ$2.0067.
The pairing was left muted on Thursday as investors continued to price in an outright majority for the Conservative Party during today’s election.
This has sent the Pound higher as this outcome would end Brexit uncertainty that has dragged on for over three years.
While Tuesday’s opinion poll forecast from YouGov sent jitters through markets as it showed the Tories’ gap narrowed. The pollsters predicted that Johnson would only win with a narrow majority, rather than the earlier prediction of a 68-seat majority.
However, the risk of a hung parliament has not been ruled out. Commenting on this, associate investment director at Killik & Co, Rachel Winter said:
‘At the moment, I still think Conservative majority is the most likely option despite the reduction in Sterling, that does still seem to be the option that markets are still pricing in.
‘But having said that, I don’t think anyone will be surprised to see a hung parliament.’
New Zealand Dollar (NZD) Muted as Markets Brace for US Trade Tariffs
The New Zealand Dollar was left flat against the Pound on Thursday as reports revealed there was a high-stakes meeting planned for Thursday.
US President Donald Trump will meet with top trade advisers later today to discuss tariffs planned for 15th December.
The ‘Kiwi’ edged lower as markets braced for potential negative impacts, as the final decision will rest on the President.
Officials have circulated talking points which downplay the repercussions of the next hike ahead of Trump’s meeting with Treasury Secretary Steven Mnuchin, Trade Representative Robert Lighthizer, and White House advisers Larry Kudlow and Peter Navarro.
As many expected the US and China to reach a deal ahead of the next round of tariffs, risk appetite slumped as the prospect of this is highly unlikely.
Discussing the outcome of today’s meeting in Washington, an anonymous source stated:
‘I’m expecting them to raise the tariffs on Sunday. The administration is preparing its talking points about how that’s the right thing to do. The message is that it will not be painful.’
‘Kiwi’ Flat as Visitor Arrival Growth Slows
The New Zealand Dollar was left under pressure as data revealed growth in annual visitor arrivals in New Zealand dropped to the lowest level in seven years.
Stats NZ showed that the number of visitors from Asia continued to decrease in October.
Commenting on the data, population indicators manager Tehseen Islam noted:
‘Visitor arrivals from Asia have been falling for the last nine months when compared with the same months last year.’
Pound New Zealand Dollar Outlook: Will a Conservative Majority Buoy GBP?
Looking ahead to this evening, the New Zealand Dollar (NZD) could slide against the Pound (GBP) following the release of the Business NZ PMI.
If New Zealand’s PMI slides further below 50 than expected, the ‘Kiwi’ could be left under pressure.
Meanwhile, Sterling could edge up on Friday after the results of today’s general election are announced.
If reports reveal the Conservative Party have been able to secure a majority, the Pound New Zealand Dollar (GBP/NZD) exchange rate will rise.