GBP NZD Exchange Slips after Brexit Speech Spike

January 18, 2017 - Written by James Fuller

STORY LINK GBP NZD Exchange Slips after Brexit Speech Spike

The British Pound to New Zealand Dollar exchange rate slipped on Thursday afternoon, as demand for risk-correlated currencies remained high.

With the inauguration of Donald Trump as the next US President approaching, investors have been expressing their disappointment with his lack of economic rhetoric in recent weeks by indulging in higher yielding currencies like the ‘Kiwi’.

[Previously updated 19/01/2017]

The Pound New Zealand Dollar exchange rate continued to slide on Thursday morning, lacking any support from the RIC house price balance for December.

While demand for Sterling moderated the appeal of the ‘Kiwi’ was boosted by a strong uptick in the ANZ consumer confidence index, particularly as the New Zealand manufacturing sector demonstrated further growth.

[Previously updated 18/01/2017]

After jumping by around two cents on Tuesday following Theresa May’s Brexit Speech the GBP NZD exchange rate has begun to slide once again as the Pound struggled to stabilise as its best levels.

Sturgeon Warning Pressures Pound New Zealand Dollar (GBP NZD)

The Pound New Zealand Dollar (GBP NZD) exchange rate tumbled this morning as Scotland’s First Minister, Nicola Sturgeon, warned that Theresa May’s decision to leave the single market would be catastrophic for the UK’s economy and would pave the way for a second Scottish referendum.

Sturgeon attacked May’s pursuit of a 'hard Brexit' after the PM said that she did not want ‘partial membership’ as she claimed that by remaining part of the single market it would equate to ‘not leaving the EU at all’.

Sturgeon pushed for the government to review its proposals for Brexit and to consider the wishes of people of Scotland as she said;

‘One thing should remain crystal clear: the Tory government cannot be allowed to act against Scotland’s wishes and our interests, and reject all attempts at compromise. It seems the Westminster Tory government now think they can do anything to Scotland and get away with it. They must start to understand how wrong they are.’

Sturgeon has previously argued that Scotland could retain access to the single market even if the rest of the UK leaves after the nation voted overwhelming to stay in the EU in June’s referendum.

Dairy Auction Provides Lift for New Zealand Dollar

The New Zealand Dollar recovery was aided by a rise in overall dairy prices in yesterday’s Global Dairy Auction as the average price rose 0.6% from $3,463 to $3,517 a tonne.

The rise helped to reverse the recent downtrend in prices as the last two auctions reported a 0.5% and a 3.9% fall in overall dairy price. However the ‘Kiwi’s gains were muted slightly by the news that prices for whole milk, New Zealand’s largest export actually dipped from $3,294 to $3,283.

Expectations that dairy prices would continue to rise in 2017 as they did at the end of 2016 have also been dampened as there appears to be little underlying factors to drive demand. As Amy Van Ossenbruggen, dairy analyst at AgriHQ explained
‘At present there is neither a shortage of dairy products nor an excess of product available, This situation is likely to persist for the next few months during which time prices will most likely bob up and down from week to week.’

GBP NZD Exchange Rate Forecast: UK Retail Sales Data Ahead

The GBP NZD exchange rate may rise again at the end of the week as the UK is set to release its latest Retail Sales figures.

Sale are forecast to have jumped from 6.6% to 7.6% in December as they are fuelled by holiday purchases and consumers looking to purchase items ahead of suspected price hikes at the end of January when retailers renegotiate with their suppliers.

Meanwhile the New Zealand Dollar may apply more pressure following the release of the ANZ Consumer Confidence report, with the ‘Kiwi’ likely to advance if it improves in January.

Current Interbank Exchange Rates

At the time of writing the GBP NZD exchange rate was trending around 1.70 and the NZD GBP exchange rate was trending around 0.58.

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TAGS: Daily Currency Updates Pound New Zealand Dollar Forecasts