Pound to New Zealand Dollar Exchange Rate Struggles to Recover
Despite some weak New Zealand data this morning, the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is struggling to hold its ground. Concerns about a no-deal Brexit continue to keep pressure on Sterling (GBP) after last week’s huge losses.
After opening last week at the level of 1.9772, GBP/NZD immediately trended with a downside bias as Brexit fears returned. The pair lost around a cent each day the whole week, eventually closing on Friday at the level of 1.9193.
GBP/NZD also touched on a new low before markets closed on Friday. GBP/NZD touched a low of 1.9111, the worst level for the pair in two months, since July.
At the time of writing on Monday, GBP/NZD trends just around the week’s opening levels.
The Pound is struggling to recover as no-deal Brexit fears persist. The New Zealand Dollar (NZD) is holding its ground a little amid domestic coronavirus news.
Pound (GBP) Exchange Rates Remain Throttled by Brexit Woes
Last week saw no-deal Brexit fears return full-force. The UK government announced plans to rewrite aspects of the key Brexit withdrawal agreement, set into law at the beginning of the year.
Politicians from across the EU and UK condemned the move. Some noted it was a breach of international law, and potential trade partners in the US also said it may hurt nations’ trust in Britain.
While the EU has said it will not suspend negotiations, time is limited and relations have soured. Last week’s Brexit negotiations didn’t leave markets any more optimistic on the possibility of a Brexit-deal.
With no-deal Brexit fears worsening, last week’s UK growth report didn’t help. UK growth came in worse than forecast in July, so Britain’s coronavirus outlook remains filled with concerns as well.
New Zealand Dollar (NZD) Exchange Rates Firm on Domestic Coronavirus Developments
The New Zealand Dollar’s movement was mixed last week. The currency, often correlated to risk and trade-sentiment, was weighed as investors looked for safe havens. This limited its gains against a plummeting Pound.
This morning, its strength was limited slightly further. This morning’s New Zealand services and visitors arrivals stats were worse than forecast.
On the other hand though, the currency did find a little support on the latest domestic developments regarding the coronavirus pandemic.
New Zealand Prime Minister Jacinda Ardern said today that coronavirus restrictions will be lifted across the country, except for Auckland, next week. She said:
‘I know this change will make a real difference to Air New Zealand and those parts of the country seeking increased numbers of visitors,’
Pound to New Zealand Dollar (GBP/NZD) Exchange Rate Awaiting Brexit Developments
The Pound to New Zealand Dollar exchange rate outlook remains filled with downside pressure. The UK outlook remains fairly gloomy, with the Brexit process increasingly seen as being in its final stretch before the outcome becomes clearer.
Pound investors remain focused on UK-EU Brexit relations. Any surprising developments in relations could have a big impact on the Pound. For example, if the UK government softens its stance the Pound could recover slightly.
On the other hand though, the Pound is likely to remain weak unless there is a notable improvement in Brexit fears.
The New Zealand Dollar outlook will remain sensitive to domestic coronavirus developments. However, major New Zealand data in the form of Q2 growth stats will be published on Thursday and could be influential as well.
Upcoming UK news, including job market stats and the Bank of England’s (BoE) September decision, could also influence the Pound to New Zealand Dollar (GBP/NZD) exchange rate.