GBP/NZD Exchange Rate Falls as NZ Dairy Product Prices Improve
The Pound New Zealand Dollar (GBP/NZD) exchange rate slumped this morning, with the pairing trading around NZ$1.8863
The New Zealand Dollar (NZD) benefited his morning after dairy product prices for manufacturers edged up to 8.7% in June, boosting the value of New Zealand’s most valuable commodity.
As a result, ‘Kiwi’ traders have become more optimistic ahead of today’s release of the NZ Dairy Auction figures for August, which are now expected to improve.
Melissa McKenzie, a Statistics Manager at NZ Statistics, commented:
‘The rise in prices dairy product manufacturers receive is consistent with global dairy auction prices increasing in late 2018 and early 2019. It can take time for prices set at global dairy auctions to flow through to producers’ prices, and there can be a further lag before consumers see price changes.’
US-China trade conflicts are still proving a drag on the risk-averse New Zealand Dollar, as developments between the two superpowers appear to be locked in a stalemate.
China’s Communist Party-run People’s Daily released a statement:
‘Making a fuss about Hong Kong will not be helpful to economic and trade negotiations between China and the US. They would be naive in thinking China would make concessions if they played the Hong Kong card… In the face of political intimidation, we not only dare to say no, but also take countermeasures.’
GBP/NZD Exchange Rate Falls as No-Deal Brexit Fears Rise
The Pound remains subdued today as Prime Minister Boris Johnson’s insistence on the EU’s removing of the Irish backstop has been received with criticism from the European bloc.
A spokesman for Downing Street said:
‘We have been clear that what the EU needs to understand is unless the withdrawal agreement can be reopened and the backstop abolished, there isn’t any prospect of a deal.’
Mr Johnson also called the Irish backstop ‘anti-democratic’ in a letter to European Council President Donald Tusk, which further heightened tensions between the UK and the EU.
Sterling traders are becoming increasingly jittery as a no-deal between the UK and EU now appears to be highly probable.
GBP/NZD Outlook: UK Public Borrowing Figure in Focus
Sterling investors will be looking ahead to tomorrow’s publication of the UK public sector net borrowing figure for July.
Any signs of improvement could bolster confidence in the UK economy, and thus improve the GBP/NZD exchange rate.
However, as no-deal Brexit fears continue to dominate headlines, it’s likely that we’ll see the GBP/NZD exchange rate remain subdued for the course of the week.