GBP NZD Exchange Rate Recovers from All-time Low
The Pound to New Zealand Dollar exchange rate is swiftly returning towards an all-time low, as Brexit fears overpower hawkish comments made last week by Bank of England (BoE) policymaker Kristin Forbes.
NZD GBP Exchange Rate on the Rise
Despite market relief that Donald Trump failed to dominate the presidential election debate recently, USD remains weak, allowing NZD to trend bullishly.
The New Zealand Dollar seems to have shaken off the shock of last week’s RBNZ much-anticipated, yet still disappointing, easing bias.
Wednesday brought news that the Reserve Bank of New Zealand (RBNZ) had held off on lowering interest rates, but intended to make further cuts later in the year in order to raise inflation. This caused traders to sour on the ‘Kiwi’, allowing for the Pound to recover. In his statement RBNZ Governor Graeme Wheeler told investors;
"Our current projections and assumptions indicate that further policy easing will be required to ensure that future inflation settles near the middle of the target range."
However, with US consumer confidence data due out today, which will likely have an impact upon Federal Reserve rate hike bets, USD remains muted, allowing the NZD to advance.
Pound Declining Sharply After Positivity from Forbes’ Upbeat ‘Brexit’ Remarks Wears Off
BoE Official Kirstin Forbes’ positive outlook on the UK economy in the wake of ‘Brexit’ led to a short-lived spike in the GBP/NZD exchange rate last week.
Investors also looked to profit from the record lows reported between the Pound and the ‘Kiwi’ earlier in the week. Meanwhile, the current drop in the US Dollar (USD) following a lacklustre Federal Reserve message on Wednesday also drove traders to Sterling.
Now, however, Brexit concerns are firmly back on the table, with Sterling weakened by market fears of a ‘hard Brexit’.
Also worsening Pound Sterling exchange rates are bold comments from Labour Shadow Chancellor John McDonnell, who has alarmed business leaders with his bold socialist rhetoric.
GBP NZD Exchange Rate Forecast: Pound Unable to Escape Shadow of ‘Brexit’
Ongoing worries over ‘Brexit’ are likely to cause further instability in the Pound this week as a lack of influential data releases will cause investors to focus on any remarks made regarding the future of ‘Brexit’.
Furthermore a ‘hard Brexit’ stance has gained momentum over recent weeks, which could see the UK losing access to the single market in exchange for tighter controls over immigration, causing a great deal of uncertainty among traders.
Likewise should the current trend for commodity trade remain high then the Pound could see a further slide against the ‘Kiwi’.
Current Exchange Rate
At the time of writing the GBP/NZD exchange rate was trending around 1.7709 and the NZD/GBP exchange rate was trending around 0.5644.