Pound New Zealand Dollar (GBP/NZD) Exchange Rate Rises as Tensions between US and North Korea Increase
The Pound Sterling New Zealand Dollar (GBP/NZD) exchange rate edged up, and the pairing is currently trading at an inter-bank rate of NZ$1.8822.
Markets are treading water ahead of Friday’s release of US non-farm payrolls data.
This, added to heightened tensions between the US and Iran, and now the US and North Korea likely weighed on the ‘Kiwi’.
Just days after a historical meeting between the US President Donald Trump and North Korean Leader, Kim Jong-un, North Korea has changed its tone.
While the two sides came to an agreement to resume nuclear talks, North Korea has now accused Washington of being ‘hell-bent on hostile acts’.
New Zealand Dollar (NZD) Falls as US-China Trade Talks Set to Resume
On Wednesday, Trump administration officials stated that the US and China are due to resume trade talks next week.
However, this could do little to buoy the New Zealand Dollar on Thursday morning.
In a briefing, White House Economic Advisor, Larry Kudlow told reporters:
‘Those talks will continue in earnest this coming week.’
Kudlow was unclear about when the United States and China would resume face-to-face talks, and added:
‘I don’t know precisely when. They’re on the phone. They’re going to be on the phone this coming week and they’ll be scheduling face-to-face meetings.’
Sterling (GBP) Rises despite Stagnating UK Services Sector
On Wednesday the UK services PMI revealed that the service sector output was close to stagnation in June.
Business activity only rose fractionally as the PMI slipped from 51 in May to 50.2 in June with Brexit uncertainty labelled as one of the main reasons for the fall.
The data suggested there was a decline in new business with lower levels of new work being recorded in five out of the past six months.
Commenting on the data, Duncan Brock, Group Director at the Chartered Institute of Procurement and Supply said:
‘Service sector growth slid back last month reversing the small gains made in May, as the wave of political uncertainty and weakening economy continued to undermine confidence and the appetite for new orders.
‘With a dampened mood across the sector, if a General Election is also thrown into the pot of political turmoil in the coming months, then the sector runs an even greater risk of following the manufacturing and construction sectors into cutbacks, cost-cutting and reduced workforces.’
Pound New Zealand Dollar Outlook: Will Progress in US-China Trade Negotiations Buoy NZD?
Looking ahead to the start of Friday, Sterling (GBP) could edge up against the New Zealand Dollar (NZD) following the release of the UK Halifax House Price Index.
If house prices jump higher than forecast in June, the Pound could be provided with an upswing of support.
Meanwhile, it is likely any positive reports on the progress of the US-China trade talks will buoy the ‘Kiwi’.
If reports suggest the US and China are making progress it could cause the Pound New Zealand (GBP/NZD) exchange rate to slide.