Pound to New Zealand Dollar Exchange Rate Climbing as New Zealand Manufacturing Weakens
The Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate looks on track to sustain gains this week, as global trade fears worsen the New Zealand Dollar (NZD) outlook while the Pound (GBP) outlook finds some limited support on Brexit speculation.
After last week’s volatile fluctuations, GBP/NZD has been treading higher more steadily this week as investors lose an appetite for trade-correlated currencies like NZD.
Since opening this week at the level of 1.8592, GBP/NZD has climbed and currently trends near the level of 1.8844.
Unless there is a shift in Brexit or global trade sentiment later in the day, GBP/NZD will likely sustain around two cents in gains.
Pound (GBP) Exchange Rates Rebound Extended by Data and Brexit Speculation
The Pound has been rebounding from its cheapest levels this week, and its gains have been supported further this this week’s UK data and Brexit speculation.
Yesterday’s UK retail sales results beat expectations and avoided an expected contraction in July, slightly dousing fears that Britain could be headed for a recession.
No-deal Brexit fears have also slightly lightened over the past day, amid hopes that Britain’s opposition parties could join forces to prevent a no-deal Brexit.
News that Britain’s opposition Labour Party was ramping up its plans to oust Prime Minister Boris Johnson in order to prevent a no-deal Brexit caused some light Pound support, but broad uncertainty still dominates the outlook for Brexit overall.
New Zealand Dollar (NZD) Exchange Rates Pressured by Trade Jitters and Poor Data
The New Zealand Dollar has seen bearish movement this week. The trade-correlated currency has been sold amid reaction to worsening US-China trade relations, as well as rising fears of a global growth slowdown.
There are fears that New Zealand’s economy and monetary policy outlook could be hit hard by a worsening trade war or a potential US recession.
Recent New Zealand data hasn’t been particularly supportive either. Overnight, the BusinessNZ manufacturing index surprised investors by falling to a contraction of 48.2. It marked the first contraction in the print since September 2012.
The data didn’t impact the New Zealand Dollar outlook significantly though, with focus remaining on global trade developments.
Pound to New Zealand Dollar (GBP/NZD) Exchange Rate Remains Focused on Geopolitics
Amid a slightly quieter economic calendar for Britain next week, the Pound to New Zealand Dollar (GBP/NZD) exchange rate is likely to become increasingly focused on the political and geopolitical developments that caused movement in recent sessions.
As August heads into its second half, and September’s resumption of UK Parliament draws closer, Pound investors will become more anxious about the chances of a no-deal Brexit being forced through.
If Britain’s opposition parties show more signs that they are willing to cooperate in order to block a no-deal Brexit, the Pound may see further gains.
However, if attempts fall through then no-deal Brexit fears will once again become a significant pressure on the Sterling outlook.
The New Zealand Dollar is a little more likely to be influenced by data next week, as New Zealand’s key Q2 retail sales results will be published during Friday’s Asian session.
Of course, with US-China trade and global growth fears driving NZD weakness more in recent sessions, further developments here will of course influence the Pound to New Zealand (GBP/NZD) exchange rate as well.