Pound New Zealand Dollar (GBP/NZD) Exchange Rate Muted as Brexit Talks at ‘Very Sensitive Stage’
The Pound Sterling New Zealand Dollar (GBP/NZD) exchange rate was left muted and the pairing is currently trading around NZ$1.9655.
The UK Brexit Secretary Stephen Barclay is set to meet the European Union’s chief negotiator following Thursday’s UK-Ireland talks.
The Prime Minister and his Irish counterpart, Leo Varadkar held ‘detailed and constructive’ talks which provided Sterling with an upswing of support. Although, an increase in risk-appetite following productive high-level US-China discussions buoyed the ‘Kiwi’ and left the pairing muted.
The Pound rose as Varadkar said a Brexit deal could be reached by the end of the month after his ‘very positive’ meeting with Boris Johnson.
While details of the discussions were scarce, Ireland is a major factor in the Brexit impasse due to the highly-debated Irish backstop.
Speaking to reporters, Varadkar said the talks were at a ‘very sensitive stage’ but ‘very positive and very promising’.
He also added that ‘convinced’ the UK wanted a deal, stating:
‘I do see a pathway towards an agreement in the coming weeks.’
Commenting on the effect on Sterling, head of research at brokerage, Pepperstone, Chris Weston said:
‘There is a lot to play for still and the script can change at any moment in Brexit, so it’s tough staying long GBP for any period of time.
‘It does feel that ahead of the [British parliament meeting on] 19 October that traders will be buyers of weakness, but it’s risky and, given the implied volatility, I would be keeping my position size to a minimum.’
New Zealand Dollar (NZD) Left Flat as US-China Talks End With Hopes for Limited Trade Deal
The New Zealand Dollar was likely provided with a slight upswing of support after the first day of high-level US-China trade talks ended with hopes for a limited deal.
China’s Vice Premier Liu He along with other senior officials met with US Treasury Secretary Steven Mnuchin and Trade Representative Robert Lighthizer for around seven hours of talks.
After talks concluded, US President Donald Trump reiterated his plans to meet Liu on Friday and stated:
‘We had a very, very good negotiation with China.’
Added to this, a White House official said that the talks had gone well, ‘probably better than expected’.
This provided the risk-sensitive ‘Kiwi’ with an upswing of support, however, the pairing was left muted as Brexit comments provided the Pound with support.
Pound New Zealand Dollar Outlook: Will US-China Trade Optimism Buoy NZD?
Looking ahead, the New Zealand Dollar (NZD) could edge up against the Pound (GBP) following the second day of high-level US-China trade talks in Washington.
If reports reveal that talks were successful and the US and China are closer to a trade agreement, an upswing in risk appetite is likely to buoy the ‘Kiwi’.
Meanwhile, the Pound could edge up leaving the pairing muted on a fresh bout of Brexit optimism as Brexit Secretary Stephen Barclay returns to Brussels.
If reports suggest the UK is closer to securing a Brexit deal with the EU, the Pound New Zealand Dollar (GBP/NZD) exchange rate will be left flat.