The Pound rallied against the New Zealand Dollar on Thursday, with the GBP/NZD exchange rate jumping from 1.8614 to 1.8958 in the space of hours. The future could bring further gains for Sterling, if the Conservative party seems set for a landslide election victory.
The latest general election news has seen Labour’s draft manifesto leaked to the media. Most commentators see this as a setback for Labour, as the manifesto reveal is usually a grand occasion.
Among Labour’s draft plans, which could be changed ahead of next week’s final reveal, is a strategy to renationalise UK railways.
This will likely capture the attention of commuters along the Southern railway network, which has repeatedly been hit with strikes and delays. The Conservative government has fared poorly in this area, with Southern’s inability to stick to its timetables exacerbated by the taxpayer footing the bill.
Previous YouGov polls have shown that renationalising railways ‘always polls well’, so this scheme could provide Labour with an edge in the June vote.
The draft manifesto also shows that Labour rejects the ‘no deal is better than a bad deal’ mantra of Theresa May. This has raised further concerns about what a Labour government would mean for Brexit, especially as Jeremy Corbyn has failed to confirm that he will go through with the exit process.
If Labour do seem to be gaining in the polls ahead of the election vote, the Pound could slide on increased fears of instability under uncertain leadership.
The GBP/NZD exchange rate may have given up some of its gains ahead of the BoE interest rate decision but it previously surged by 2 cents as a result of Reserve Bank of New Zealand Dollar dovishness during its May interest rate decision.
The RBNZ’s inflation estimate was reduced to 1.1% in 2018, while minutes showed that the bank did not expect to raise interest rates until late 2019.
This high level of caution has put the dampeners on NZD traders and may lead to greater New Zealand Dollar to Pound losses in the future.
If the RBNZ persists in its dovish outlook in future policy meetings, the GBP/NZD exchange rate has the potential to achieve new highs.
Recent Interbank GBP NZD Exchange Rates
At the time of writing, the Pound to New Zealand Dollar (GBP NZD) exchange rate was trading down at 1.8860 and the New Zealand Dollar to Pound (NZD GBP) exchange rate was trading up at 0.5307.
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