GBP/NZD Exchange Rate Falls, New Zealand Dollar Benefits from Risk-Off Markets
The Pound New Zealand (GBP/NZD) exchange rate fell by -0.4% today, leaving the pairing fluctuating around NZ$1.984 after US-China trade jitters calmed. Washington described the talks between the two superpowers as being ‘productive’.
As a result, trade-exposed currencies like the New Zealand Dollar have benefited today, with no NZ economic data releases being due out until tomorrow.
Chetan Ahya, an Analyst at Morgan Stanley, recommended caution, however:
‘Trade tensions have provided many twists and turns so far, with truces giving way to stalled progress and subsequent escalation.’
However, following the International Monetary Fund’s comments that risks to the NZ economy have increased, many ‘Kiwi’ traders are becoming increasingly jittery. Consequently, we could see NZD’s gains being short-lived.
GBP/NZD Exchange Rate Eases as UK Braces for Supreme Court Verdict on Parliament’s Prorogation
The Pound fell against the New Zealand Dollar as UK markets brace for the UK’s Supreme Court’s verdict on the Conservative Government’s prorogation of Parliament.
Dominic Raab, Secretary of State for Foreign Affairs, commented:
‘I think let’s wait and see what the first judgement decides and then we will understand the lie of the land. As you know I am very keen not to get ahead of ourselves on this and I’m also keen not to take levers off the table that weaken the position of the UK in Brussels.’
However, as Prime Minister Boris Johnson continues to remain adamant on the UK’s leaving the European Union on October 31 – despite legislation preventing a no-deal Brexit – hopes of the Conservative Government opening Parliament in the near term are low.
Mr Johnson has also played down chances of a Brexit breakthrough at the UN summit in New York, in which he will meet with various European leaders.
The Prime Minister commented:
‘I would caution you all not to think this is going to be the moment. I don’t wish to elevate excessively the belief that there will be a New York breakthrough. I’m not getting pessimistic – we will be pushing ahead, but there is still work to be done.’
GBP/NZD Outlook: Pound Could Rise if US-China Trade Tensions Flare-Up
Pound traders will be looking ahead to tomorrow’s release of August’s UK public sector net borrowing figure, which is expected to improve from £-1.971 billion to £6.650 billion. As a result, this could prove Pound-positive.
Tomorrow will also see the publication of New Zealand’s trade balance figure for August. However, as this is expected to sink to £-4.86 billion, we could see NZD lose some of today’s gains.
The GBP/NZD exchange rate could begin to edge higher this week if the NZ economy shows any signs of faltering. Also, any further indications of US-China trade tensions could weigh on the risk-averse New Zealand Dollar