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Pound New Zealand Dollar (GBP/NZD) Exchange Rate Rallies in Spite of Latest Round of UK Job Cuts

New Zealand Dollar Currency Forecast

Rising UK Job Losses Fail to Drag on Pound New Zealand Dollar (GBP/NZD) Exchange Rate

The prospect of further job losses in the UK hospitality sector failed to keep the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate from pushing higher on Thursday.

While the country looks set to experience another wave of job losses in the final months of the year, as a result of tightened Covid-19 restrictions, this put limited pressure on Pound Sterling (GBP).

Investors were encouraged by the UK government’s latest signals on Brexit, with the prime minister’s spokesperson noting that Boris Johnson still wants to reach a trade deal.

As long as the UK and EU look set to continue engaging on the subject this could limit the potential for renewed GBP exchange rate weakness.

However, with the December cut-off point still fast approaching any persistent lack of progress may still weigh on the appeal of the Pound.

Stronger NZ PMI May Lift New Zealand Dollar in Advance of General Election Results

The New Zealand Dollar (NZD) could find a rallying point overnight, though, if September’s Business NZ PMI picks up as forecast.

With the index looking set to rise from 50.7 to 51.1 on the month this could restore some confidence in the outlook of the New Zealand economy.

Evidence of increasing resilience within the economy may encourage bets on the prospect of a stronger third quarter gross domestic product reading, offering NZD exchange rates a boost.

Even so, the potential for New Zealand Dollar gains could still prove limited ahead of Sunday’s general election.

While the odds appear to point towards re-election for Prime Minister Jacinda Ardern the possibility of a political upset cannot be ruled out, keeping NZD exchange rates under a degree of pressure in the near term.

A lack of political change over the weekend may pave the way for a fresh New Zealand Dollar rally, however.

Pound Upside Potential Limited Ahead of UK Inflation Report

With UK data thin on the ground in the next few days the potential for greater Pound Sterling gains appears muted.

Growing pushback against the tightening of the UK’s Covid-19 restrictions could still weigh on the GBP/NZD exchange rate, though.

As the UK economy still appears at risk of facing a renewed loss of momentum in the face of weaker consumer spending and confidence the Pound could easily falter in the days ahead.

With forecasts pointing towards September’s UK consumer price index returning to positive territory on the month, though, support for the Pound may pick up in anticipation of Wednesday’s inflation report.

Even so, Brexit-based jitters may still cause selling pressure for GBP exchange rates as long as a final deal remains lacking.

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