January 15, 2019 - Written by John Cameron
STORY LINK GBP/NZD: Pound Sterling New Zealand Dollar Exchange Rate Slips as Prices Rise at NZ Dairy Auction
Pound Sterling weighed Down by New Zealand Dairy Price Increase
Today is the fifth and final day of the UK Parliament’s Brexit debates, with the ‘meaningful vote’ scheduled for later on this evening.
The Pound New Zealand Dollar (GBP/NZD) exchange rate slid over the course of the morning, and is currently trading at a rate of NZ$1.8818.
Theresa May is expected to lose the vote this evening, with the Democratic Unionist Party (DUP), opposition parties and some members of the Conservative Party expected to vote against her agreement, causing the Pound to fall during today’s session so far.
The New Zealand Global Dairy Trade Price Index was released today, with the ‘Kiwi’ pushing higher against the Pound as the price of dairy increased by 4.2%.
Pound Buoyed by PM’s Suggestion MPs more likely to Block Brexit than No-deal
Yesterday saw the GBP/NZD exchange rate rise as comments from Theresa May suggested the UK could potentially remain a part of the European Union.
Downing Street reportedly said that ‘based on the evidence of the last week’ it was far more likely that MPs would manage to block Brexit than the UK leaving the European Union without a deal.
May also stated that the EU had rejected her proposal for a time limit on the Irish backstop as well as stating that she would not be extending Article 50.
Despite this, the Pound remained buoyed over the course of the session.
China’s Drop in Exports Weighs Down Risk-Sensitive New Zealand Dollar (NZD)
With China being one of New Zealand’s largest trade partners, the disappointing Chinese trade figures dragged down the risk-sensitive ‘Kiwi’.
The December import and export figures arguably have provided the first indication of the impact of the US-China trade tensions, with the drop in exports the sharpest since December 2016.
Despite the forecast suggesting that imports would increase compared to the previous year, the figure plummeted -7.6%. While exports were predicted to show slowed growth, this figure also contracted.
GBP/NZD Exchange Rate Outlook: Parliament’s ‘Meaningful Vote’ Likely to Cause Volatility
The outcome of the UK Parliament’s ‘meaningful vote’ on Brexit is likely to have a big effect on the Pound Sterling New Zealand Dollar (GBP/NZD) exchange rate, as the Pound is likely to plummet or rally depending on the way MPs vote.
This evening will also see the release of the New Zealand Electronic Card Retail Sales for December, which could lend support to the ‘Kiwi’ if the figure increases compared to the previous month, and if there is an increase from the previous year’s figure of 4.6%.
Tomorrow morning the Governor of the Bank of England (BoE), Mark Carney, is due to give a speech, and depending on whether his tone is dovish or hawkish, there could be movement in the pairing.
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TAGS: Pound New Zealand Dollar Forecasts