April 10, 2019 - Written by John Cameron
STORY LINK Pound New Zealand Dollar (GBP/NZD) Exchange Rate Increases as Brexit Delay Hopes Increase
GBP/NZD Exchange Rate Rises as US-China Trade Talks Stall
The Pound New Zealand Dollar (GBP/NZD) exchange rate rose today and is currently trading around NZ$1.9369 on the inter-bank market.
The New Zealand Dollar (NZD) fell against Sterling today as US-China trade talks appear to be dragging on longer than expected, with fears that the two superpowers could fail to meet a consensus.
With a general lack of New Zealand economic data releases today, many ‘Kiwi’ traders are focusing on developments between the US and their closest trading partner, China, and with a lack of news surrounding the talks many traders have remained cautious.
Gita Gopinath, a Chief Economist at the International Monetary Fund, remained sceptical about trade talk developments, saying:
‘We see an escalation of trade tensions as an important risk. Though there has been improvement between the U.S. and China and a possible agreement in the near future, we are worried about trade tensions escalating in other sectors, like the auto sector.’
GBP/NZD Exchange Rate Rises as UK GDP Figures Improve
Sterling, meanwhile, has benefited from rising hopes that the EU could grant the UK a year-long extension to Brexit this evening, following discussions among the EU27 during an emergency summit.
Today saw the publication of the UK GDP figures for February which increased above expectation to 0.2%.
Rob Kent-Smith, Head of the GDP at Office for National Statistics, commented:
‘GDP growth remained modest in the latest three months. Manufacturing also continued to recover after weakness at the end of last year, with the often-erratic pharmaceutical industry, chemicals and alcohol performing well in recent months.’
These were followed by the release of the UK manufacturing production figures for February, which shot up above forecast at 0.9%.
UK industrial production figures for February also increased.
However, with Brexit news dominating headlines, many Pound traders have instead focused on developments over in Europe ahead of tonight’s important emergency EU summit.
GBP/NZD Forecast: Sterling Could Rise if EU Summit Grants Brexit Extension
New Zealand Dollar traders will be awaiting the publication of the Chinese CPI figures for March tomorrow, which are expected to improve.
Tomorrow will also see the printing of the New Zealand business PMI figures for March. These will be followed by the New Zealand electronic card retail sales figures for last month.
The GPB/NZD exchange rate will be directed by the outcome of this evening’s decision by the EU on whether the UK will be granted an extension to Brexit.
Any indications that this could be forthcoming would see the Pound rally.
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