Money Transfer.co.uk

Compare money transfers, currency exchange and international transfer

Sun 20 Oct 2019 09:44GMT

Compare Money Transfers. Safe. Fast. Free.

A money transfer through a foreign exchange broker is the smart move. With excellent exchange rates and fee-free transfers, you could save time and money.

I need to send money...

Pound New Zealand Dollar (GBP/NZD) Falls as BoE Warns of Likely Brexit Recession on No-Deal

Published: 1 Aug at 5 PM Tags: Pound Sterling, Dollar Exchange Rate, New Zealand Dollar Exchange Rate, Currency Exchange, Canadian Dollar Exchange Rate, Euro Crisis, UK, Exchange Rates, Economy, Inflation,

The Pound New Zealand Dollar (GBP/NZD) exchange rate eased today, leaving the pairing fluctuating around NZ$1.850.

Sterling fell against the New Zealand Dollar following the announcement of the Bank of England’s interest rate decision today, which held at 0.75%.

However, Mark Carney, the Governor of the BoE, was downbeat in his forecast, saying that the UK could face a likely recession on a no-deal Brexit – a prospect that now looks highly likely.

Mr Carney said:

‘After a no-deal Brexit, sterling would likely fall, risk premia on UK assets rise and volatility spike higher. No-deal preparation by government and business cannot eliminate need for fundamental economic adjustments that will be needed after no-deal.’

Today also saw the publication of the UK Markit Manufacturing PMI for July, which remained in contraction territory at 48.

Duncan Brock, a Group Director at the Chartered Institute of Procurement and Supply, said:

‘A killer combination of economic uncertainty and the weakest production levels for seven years, battered the manufacturing sector into contraction for the third consecutive month in July.’

The New Zealand Dollar rose against Sterling despite last night’s fall after the US Federal Reserve cut its rate for the first time in over a decade.

This heightened fears that the Reserve Bank of New Zealand would also cut its official cash flow rate with NZ suffering from similar issues as low inflation and growth, along with heightened global risks continually weighing on the risk-averse ‘Kiwi’.

US-China talks, which came to an uncertain end this week, but which nonetheless were described as ‘constructive’, have provided little uplift for NZD traders.

Robert Carnell, an Economist with ING Asia, commented:

‘The issues that are making these trade talks hard to conclude are not likely to be any less difficult in September. We are not holding out much hope of a breakthrough then either.’

As the New Zealand economy relies heavily the China’s, continued tensions between the two superpowers leaves markets unwilling to trade in the risk-sensitive New Zealand Dollar.

Sterling traders, meanwhile, will be looking ahead to tomorrow’s publication of the UK Markit Construction PMI for July, which is expected to improve slightly.

However, as it is expected to remain in contraction territory, this is unlikely to prove Pound-positive.

The GBP/NZD exchange rate will likely remain downbeat into the weekend, as the UK and EU are currently in a deadlock over the Irish backstop, and with negotiations failing to manifest, we could see Sterling fall further on Brexit uncertainty.
Advertisement