Pound New Zealand Dollar (GBP/NZD) Exchange Rate Falls as Hunt Urges Johnson not to be ‘a Coward’
The Pound Sterling New Zealand Dollar (GBP/NZD) exchange rate slumped, and the pairing is currently trading at an inter-bank rate of NZ$1.9261.
The pairing slipped as fears the UK would crash out of the European Union on 31 October continued to weigh on Sterling.
Front-runner Boris Johnson now faces Foreign Secretary Jeremy Hunt in the leadership contest to become the next Prime Minister.
In an attempt to get Johnson to debate him on TV later this week, Hunt urged him not be be ‘a coward’ about facing public scrutiny.
New Zealand Dollar (NZD) Rises as US and China Must ‘Compromise’
On Monday, Chinese Vice Commerce Minister, Wang Shouwen said that both China and the United States should make compromises during trade talks.
The Vice Commerce Minister also stated that US-China trade discussions were underway, however he did not give any further details.
Wang Shouwen emphasised that China’s principles were clear, and stated:
‘Mutual respect means each side must respect the other’s sovereignty.
‘Equality and mutual benefit means the consultations have to happen on an equal basis, the agreement to be reached has to be beneficial for both sides.
‘Meeting each other half way means both sides have to compromise and make concessions, not just one side.’
Sterling (GBP) Slumps as Consumer Spending Could Fall to Six-Year Low
Meanwhile, the EY ITEM Club revealed that the UK will see the slowest growth in consumer spending in six years.
This likely dampened sentiment in Sterling.
The economic forecasting group said the outlook is now weaker despite consumer spending benefitting from employment growth and rising real wages over the past year.
Commenting on the latest data, Chief Economic Advisor to the EY ITEM Club, Howard Archer said:
‘The improvement in purchasing power has meant that consumers have been significantly less affected in their spending decisions than businesses by uncertainties over the economy and Brexit.
‘While consumer confidence in late 2018/early 2019 weakened to the lowest level since mid-2013, perceptions of personal finances and a willingness to spend generally held up much better than views of the economy.’
Pound New Zealand Dollar Outlook: Will a Dovish RBNZ Weigh on NZD?
Looking ahead to the start of Wednesday the New Zealand Dollar (NZD) could fall against the Pound (GBP) following the release of the Reserve Bank of New Zealand (RBNZ) interest rate decision.
If the bank’s tone is overly dovish in its rate statement, and mentions the risks of ongoing US-China trade tensions, it could dampen sentiment in NZD.
Meanwhile, it is likely the ‘Kiwi’ will remain under pressure ahead of the meeting between US President Trump and Chinese leader, Xi Jinping at the G20 summit.
If reports suggest the meeting will be successful, it could boost risk-appetite and cause the Pound New Zealand Dollar (GBP/NZD) exchange rate to slide.