GBP NZD Exchange Rate Steady as Tusk Issues Brexit Guidelines

March 31, 2017 - Written by Tim Boyer

STORY LINK GBP NZD Exchange Rate Steady as Tusk Issues Brexit Guidelines

The GBP NZD exchange rate stabilised this morning as the European Union published its negotiation strategy for Brexit.

Pound New Zealand Dollar (GBP NZD) Stable as EU Prepares for Brexit Talks

The Pound New Zealand Dollar (GBP NZD) exchange rate held steady this morning as European Council President Donald Tusk released draft guidelines on the EU’s negotiation strategy for Brexit.

Recent comments from EU leaders that the UK would have to formalise its exit agreement from the bloc before any talks of a future relationship could begin had placed some pressure on Sterling, with investors speculating that it would leave little time for a trade deal to be worked out before the two year negotiation period was over.

However the guidelines suggest that trade talks could take place once ‘sufficient progress’ had been made in negotiating Britain’s exit and allow for ‘an overall understanding on the framework for the future relationship’ to be agreed upon.

Tusk also said that be believed that Brexit talks would remain civil and that the remaining members would not seek to punish the UK for voting to leave, saying;

‘The EU 27 does not, and will not pursue a punitive approach - Brexit in itself is already punitive enough.’

GBP Investors were upbeat about the news as it suggested that the framework for a trade agreement could be in place by the time the official negotiation period concluded in 2019.

New Zealand Dollar Pressured by dip in Business Confidence

The New Zealand Dollar was weakened overnight on Thursday as domestic business sentiment tumbled in March.

Data compiled by ANZ bank showed that confidence plummeted from 16.6 to 11.3 last month its lowest level since May as the recent downturn in dairy prices prompted concerns over the state of New Zealand’s largest export market.

However businesses were slightly more optimistic about their opportunities for growth over the next 12 months as 38.8% of firms surveyed expected to expand over the next year, up from 37.2% the month before and far higher than the average of 28%.

GBP NZD Exchange Rate Forecast: Brexit Volatility Ahead?

The GBP NZD exchange rate is likely to become increasingly volatile over the coming weeks as investors become extremely sensitive to any mention of Brexit by politicians and economists as they hope to gain some idea of how negotiations may go.

Meanwhile those looking to trade in the New Zealand Dollar will be eagerly awaiting next week’s Global Dairy Auction, with a second consecutive rise in prices likely to drive the ‘Kiwi’ higher.

Current Interbank Exchange Rates

At the time of writing the GBP NZD exchange rate was trending around 1.78 and the NZD GBP exchange rate was trending around 0.56.

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