GBP/NZD Exchange Rate Falls, US-China Trade Deal Optimism Boosts ‘Kiwi’
The Pound New Zealand Dollar (GBP/NZD) exchange rate dipped by -0.3% today, with the pairing currently trading around NZ$ 2.005.
The ‘Kiwi’ continues to benefit from rising hopes over a ‘Phase One’ US-China trade deal by the end of the year, despite rising tensions between the two superpowers.
This follows US President Donald Trump’s signing into law a Hong Kong Bill, which aims to protect Hong Kong protestor’s human rights. It’s a move that has sparked condemnation from Beijing, with the Chinese Ministry of Foreign Affairs accusing Washington of ‘sinister intentions’.
Chen Hao, a Strategist at KGI, commented:
‘After the initial assessment, the market has probably figured out that the impact of the bill would be far-reaching in the fronts of both the economy and politics. A trade deal has now become a wild card.’
With no New Zealand economic data today, the NZD/GBP exchange rate will continue to be driven by US-China trade developments, with any signs of tensions settling between the two superpowers likely boosting the ‘Kiwi’.
GBP/NZD Exchange Rate Rangebound, UK Consumer Confidence Sticks at Six-Year Low
The Pound (GBP) fell against the New Zealand Dollar (NZD) today after the UK GfK consumer confidence survey figure held at -14, its worst level in six years due to ongoing uncertainty around Brexit and the upcoming December general election.
Joe Staton, Client Strategy Director at GfK, was downbeat in his assessment, saying:
‘We have not seen a positive headline score since January 2016 – that’s nearly four years ago. Uncertainty is nobody’s friend. While many issues are under the spotlight in this election, political parties will need to satisfy voters that they will be effective for the wider economy and that, as a consequence, people will be better off next year and beyond.’
UK markets are becoming increasingly jittery ahead of the 12th December election, despite yesterday’s major YouGov survey which indicated a large majority for Prime Minister Boris Johnson and the Conservative Party next month.
However, with just two weeks to go, Pound investors are remaining cautious with British political developments expected to intensify in the coming weeks.
GBP/NZD Outlook: Could British Political Uncertainties Weaken the Pound?
New Zealand Dollar (NZD) investors will be looking ahead to Tuesday’s publication of the New Zealand Global Dairy Trade Index, which is expected to rise by 0.5%. However, any slippage in New Zealand’s largest commodity could weaken the ‘Kiwi’.
Sterling traders, meanwhile, will be awaiting Monday’s UK Markit manufacturing PMI for November, which is forecast to remain mired in contraction territory at 48.3, potentially weighing on the GBP/NZD exchange rate at the beginning of the week.
British politics will remain in focus, however, with any signs of the Labour Party clawing back some of its losses in the opinion polls likely to heightened fears of a hung Parliament, a prospect that would weaken the Pound.
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