GBP/NZD Exchange Rate Rangebound as Trade Tensions Hold Back Risk-Averse ‘Kiwi’
The Pound New Zealand (GBP/NZD) exchange rate steadied today and is currently trading around NZ$1.9201 on the interbank market.
The New Zealand (NZD) failed to make any gains against the Pound (GBP) as the risk-averse currency is still being plagued by the ongoing US-China trade war, in which China is now playing a perceived ‘blame game’, according to the US.
A statement from the Office of the United States Trade Representative (USTR), tellingly said:
‘Our negotiating positions have been consistent throughout these talks, and China backpedalled on important elements of what the parties had agreed to.’
New Zealand Dollar traders will be awaiting today’s release of the NZ GDT price index figures, and with any signs of improvement, this could prove beneficial for ‘Kiwi’.
The Pound, meanwhile, weakened following the release of the BRC like-for-like retail sales for May, which fell by -3.0%.
GBP/NZD Exchange Rate Flat as UK Construction Contracts
Sterling further struggled following the UK Markit construction PMI figures for May, which contracted at 48.6 – missing their forecast improvement at 50.5.
Duncan Brock, the Group Director at the Chartered Institute of Procurement and Supply remained downbeat, saying:
‘A fragile dreariness descended on the sector this month with lower workloads leading to the fastest decline in purchasing of construction materials since September 2017.’
‘With the continuing uncertainty around Brexit and instabilities in the UK economy, client indecision affected new orders which fell at their fastest since March 2018 and particularly affected commercial activity.’
Meanwhile, Prime Minister Theresa May, in one of her last acts as Conservative leader before she steps down on Friday, was to comment on the possibility of a ‘great partnership’ with the US post-Brexit, during US President Donald Trump’s state visit to the UK.
Pound traders, however, have remained cautious as there have been no noticeable developments surrounding Brexit – and with talks of trade deals with the US – this has left some feeling jittery.
GBP/NZD Outlook: Brexit and Conservative Leadership to Remain in Focus
Pound traders will be looking ahead to tomorrow’s release of the UK Markit services PMI figures for May, which are expected to improve.
‘Kiwi’ investors, meanwhile, will be keeping an eye on China’s economic development, being New Zealand’s closest trading partner.
Tomorrow will see the printing of the Chinese Caixin services PMI figures for May, and with any signs of improvement, this could provide some uplift for the NZD/GBP exchange rate.
The Pound New Zealand (GBP/NZD) exchange rate will remain sensitive to political developments into the week, and with Brexit uncertainty rising as well as a question mark over the future leader of the Tories, the Sterling is not likely to make any sudden jumps.