February 27, 2019 - Written by John Cameron
STORY LINK Pound Sterling New Zealand Dollar (GBP/NZD) Exchange Rate Rises as Trump-Kim Summit Begins
Pound New Zealand Dollar (GBP/NZD) Exchange Rate Rallies Ahead of Trump-Kim Summit
The Pound New Zealand Dollar (GBP/NZD) exchange rate has risen by close to 1%, still buoyed from Brexit optimism, with the pairing currently trading at an inter-bank rate of NZ$1.9409.
The Pound extended its gains as investors calculated that a no-deal Brexit was less likely, and the UK’s departure from the European Union would be delayed.
Brexit optimism remains, and when commenting on her discussions in Brussels, Prime Minister Theresa May said:
‘I have found a real determination to find a way through which allows the UK to leave with a deal. That engagement has already begun to bear fruit.
‘Parliament should do its duty so our country can move forward.’
Meanwhile, US President Donald Trump and North Korean Leader Kim Jong-un met to start their high-profile summit in Hanoi, Vietnam.
During their 20-minute chat before sitting down for dinner, Kim Jong-un said he and President Trump ‘shared a lot of interesting stories.’
Despite this, the risk-sensitive New Zealand Dollar continued to slide against Sterling.
Highest NZ January Trade Deficit on Record
The start of Wednesday’s session showed that New Zealand had recorded its highest January deficit on record at -NZ$914M.
Following this, the pairing slipped slightly before rallying once again.
Data showed that imports rose twice as fast as exports, causing the trade deficit to surpass its previous January record of NZ$894M from January 2006.
Imports rose by 7.7% compared to exports which rose by 3%, and commenting on the data, International Statistics Manager at Stats NZ, Tehseen Islam, said:
‘Both imports and exports were up compared with January 2018. However, this month’s large trade deficit reflects that imports are rising much faster than exports.’
It was reported January’s largest fall in exports came from meat and edible offal, which slipped by $66M, and exports of lamb to the EU slid to its lowest value since 2006.
Brexit Optimism Buoys GBP
Sterling rallied against the New Zealand Dollar during the session yesterday as Prime Minister Theresa May sparked optimism.
The PM promised MPs they would be able to vote to extend Article 50, ruling out a no-deal if her withdrawal agreement gets voted down on 12 March.
This saw the Pound rally against most major currency pairings including the New Zealand Dollar.
Sterling remained strengthened despite May’s reiteration that she did not want to see Article 50 extended.
The Prime Minister said:
‘Let me be clear, I do not want to see Article 50 extended.
‘Our absolute focus should be on working to get a deal and leaving on 29 March.
‘[…] And the House should be clear that a short extension – not beyond the end of June – would almost certainly have to be a one-off.’
GBP/NZD Outlook: Will Sterling Slide on Low Consumer Confidence?
The Pound New Zealand Dollar (GBP/NZD) exchange rate could fluctuate during the session tomorrow following the release of the ANZ Activity Outlook and Business Climate figures.
If New Zealand’s activity outlook continues to increase, it could buoy the ‘Kiwi’.
However, this could be offset by a further slip in business confidence.
The GBP/NZD exchange rate could fall tomorrow following the release of February’s Gfk Consumer Confidence survey for the UK.
If confidence slips as forecast from -14 to -15 it could dampen Pound sentiment.
It is also likely that US China trade tensions and Brexit will cause movement in the pairing.
If there are further signs that the US and China are closer to reaching a deal risk appetite is likely to increase, which could see the ‘Kiwi’ rise.
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TAGS: Pound New Zealand Dollar Forecasts