GBP/NZD Exchange Rate Falls as Trump Announces Delay on Chinese Tariffs
The Pound New Zealand (GBP/NZD) exchange rate is down today and is currently trading at NZ$1.8952 on the inter-bank market.
The New Zealand Dollar edged higher against the Pound following US President Donald Trump’s announcement that he would delay imposing tariffs on US$200bn of Chinese imports, which eased pressure on the risk-sensitive New Zealand currency.
Trump described the trade talks between the US and China as being ‘productive’, which has further buoyed market confidence in NZD as there is growing optimism that the US and China will reach a consensus.
Tai Hui, a Chief Market Strategist at JP Morgan for Asia Pacific, was also optimistic, saying:
‘The high frequency engagement between Beijing and Washington at a senior level implies that both sides are looking for some form of settlement.’
China is New Zealand’s biggest trading partner, and any news that US-China trade relations are easing is positive for the New Zealand Dollar.
The New Zealand Dollar further benefited from Sunday’s release of the New Zealand retail sales figures for the fourth-quarter, which increased 1.7%.
GBP/NZD Exchange Rate Falls Despite Rising Brexit Optimism
The Pound, meanwhile, failed to gain against the ‘Kiwi’ today despite rising Brexit optimism following Prime Minister Theresa May saying that Wednesday’s ‘meaningful vote’ would be delayed until 12 March.
May reassured investors by saying that talks between the UK and the EU were still ‘ongoing’ and ‘positive’.
Sterling investors have also been buoyed by the increasing likelihood of Article 50 being extended.
The senior Labour MP Yvette Cooper, and Conservative MP Oliver Letwin, are continuing to push for their bill that would force the Government to delay Brexit if a deal is not secured by 13 March – a day after the ‘meaningful vote’.
New Zealand Dollar Pound (NZD/GBP) Exchange Rate Rises as New Zealand-China Ties Remain Strong
The New Zealand Dollar has further benefited from news that New Zealand’s ties with China remain strong, despite last week’s concerning news that China had turned away Air New Zealand aircraft and had discouraged Chinese tourists from visiting.
Nevertheless, Stephen Jacobi, an Executive Director of the New Zealand China Council, remained cautious, saying:
‘Both governments have, in recent days, repeated the importance of the bilateral relationship and the need to balance it [the relationship] in these difficult and complex geopolitical times. But that does not mean the Chinese government is not concerned with some of the decisions we [New Zealand Government] have made … They are.’
GBP/NZD Forecast: Pound Could Rise if UK Economy Shows Signs of Improvement
Pound traders will be awaiting Theresa May’s speech tomorrow in which she will clarify developments regarding Brexit negotiations, and with any signs of a breakthrough this could prove Pound-positive.
Tomorrow will also see the publication of the UK Treasury Committee’s inflation report hearings, with Sterling sensitive to any signs of a struggling UK economy.
NZD traders, however, will be awaiting the publication of New Zealand’s year-on-year trade balance figures tomorrow, which are expected to improve.