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Pound-to-New-Zealand-Dollar Rate Edges Up as Brexit Options ‘Narrowing’ as MPs Seize Control

March 26, 2019 - Written by John Cameron

Pound New Zealand Dollar (GBP/NZD) Exchange Rate Rises as Brexit Options ‘Narrowing’ After PM’s Defeat

The Pound New Zealand Dollar (GBP/NZD) exchange rate edged up later this morning, and the pairing is currently trading at an inter-bank rate of NZ$1.9179.

Prime Minister Theresa May was dealt yet another blow last night as the government was defeated by 27 votes.

MPs voted to seize control of the parliamentary timetable in order to find a majority for any Brexit option.

During the voting thirty Conservative MPs rebelled, including three Ministers - Alistair Burt, Richard Harrington and Steve Brine – who subsequently resigned.

Harrington accused the government of ‘playing roulette with the lives and livelihoods’ of public.

Commenting on the options that face the House of Commons, Health Secretary Matt Hancock said:

‘In the previous votes there have been a multitude of potential different options – the sorts of options, like a second referendum, which I think would be a bad idea, that’s been rejected.

‘The idea of having a no-deal […] The Commons is absolutely clear it won’t allow and will legislate against it if necessary.

‘That means that the options are narrowing.’

New Zealand Dollar (NZD) Slips despite Record High Lamb Exports

Data released last night showed that New Zealand’s February trade balance was stronger than expected.

February’s monthly trade balance was a surplus of $12 million as exports rose above expectations and imports did not rise as high as expected.

However this did little to prevent the New Zealand Dollar (NZD) slipping against the Pound (GBP) on Tuesday.

Exports of lamb hit record levels, and exports are expected to continue to grow in the next few months.

Data showed that lamb exports were $391 million, a new record for any month, and the previous record was from May 2018 where lamb exports stood at $367 million.

Overall meat exports also reached a record of $839 million, while the rise in imports was led by vehicles, parts, and accessories as motor vehicles were up $93 million.

Pound New Zealand Dollar Outlook: Will the GBP/NZD Exchange Rate Slide on Hawkish RBNZ?

It is likely the New Zealand Dollar (NZD) will rise against the Pound (GBP) following the release of the Reserve Bank of New Zealand’s (RBNZ) interest rate decision.

It is expected that interest rates will remain steady at 1.75%, which could buoy the ‘Kiwi’.

However, if the RBNZ’s rate statement is dovish, and suggests that there could be an interest rate cut in 2019, NZD could slide.

As there is a lack of UK economic data it is likely Brexit will remain one of the main catalysts for the pairing ahead of further votes on alternatives to the Prime Minister’s withdrawal agreement.

The options MPs are to vote on may include staying in the EU customs union, holding a second referendum, no-deal and revoking Article 50.

If options such as revoking Article 50 gain a lot of support it is likely the Pound New Zealand Dollar (GBP/NZD) exchange rate will rise.

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