May 16, 2019 - Written by John Cameron
STORY LINK Pound New Zealand Dollar (GBP/NZD) Exchange Rate Sinks as ‘Kiwi’ Traders Await Business PMI Figures
GBP/NZD Exchange Rate Falls despite Increasing US-China Trade Tensions
The Pound New Zealand Dollar (GBP/NZD) exchange rate is down by 0.3% today and is currently trading around NZ$1.9521 at the time of writing.
The New Zealand Dollar (NZD) edged higher against the Pound (GBP) despite US-China trade tensions being exacerbated by the US blacklisting the Chinese telecom giant, Huawei.
This came following Donald Trump’s declaration of a national emergency, seeing foreign telecom countries as a possible threat to national security.
Many ‘Kiwi’ traders will be awaiting the publication of the New Zealand business PMI figures for April today, which are expected to improve.
The Pound, meanwhile, has struggled following Theresa May’s announcement that she would go ahead with a vote on her Brexit deal as early as June, however this has left many Sterling traders jittery on fears of a possible no-deal scenario.
GBP/NZD Exchange Rate Sinks as May’s Leadership is Challenged
Theresa May has also come under increasing pressure from the 1922 Committee executive today, with a number of influential Tory MPs urging May to reveal a departure date – whether her deal proves successful or not in June.
Boris Johnson, the former Foreign Secretary, also announced that he would be willing to stand for leadership, saying ‘Of course I’m going to go for it’.
With signs that May’s leadership is coming under increasing strain, this has tended to drag on Sterling with cross-party talks also showing no signs of emerging on a Brexit compromise.
Rebecca Long Baily, the shadow Business Secretary, said:
‘In terms of the customs union, we’ve been repeatedly pushing them on this point, and they haven’t reached the position that we would like them to get to by any stretch at the moment.’
NZD/GBP Exchange Rate Rises despite Easing Chinese Industrial Production
The New Zealand Dollar lost some of its gains on the Pound following last night’s publication of the Chinese industrial production figures for April, which eased at 5.4%.
Ongoing US-China trade tensions are providing a drag on the ‘Kiwi’, but following Trump’s promising of a trade deal emerging, fears have been quelled somewhat.
Hu Xijin, the Editor in Chief at the Global Times, was critical, however, saying:
‘China may stop purchasing US agricultural products and energy, reduce Boeing orders and restrict US service trade with China. Many Chinese scholars are discussing the possibility of dumping US Treasuries and how to do it specifically.’
GBP/NZD Outlook: Brexit Developments to Remain in Focus
‘Kiwi’ traders will be looking ahead to Monday’s New Zealand retail sales figures for the first quarter, and with any signs of an improvement, this could buoy the NZD/GBP exchange rate higher.
Pound investors, meanwhile, will be focusing Brexit developments in the coming weeks, and with May’s leadership increasingly challenged, this is tending to weigh on confidence in the Government’s ability to form a Brexit consensus.
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TAGS: Pound New Zealand Dollar Forecasts