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Pound Sterling New Zealand Dollar (GBP/NZD) Exchange Rate Flat as Ex-Brexit Secretary Urges MPs to Reject PM’s ‘New’ Deal

May 20, 2019 - Written by John Cameron

Pound New Zealand Dollar (GBP/NZD) Exchange Rate Muted Ahead of May’s ‘New and Improved’ Brexit Deal

The Pound Sterling New Zealand Dollar (GBP/NZD) exchange rate remained flat and the pairing is currently trading at an inter-bank rate of NZ$1.9472.

On Sunday the Prime Minister stated that she will present a ‘new and improved’ Brexit Withdrawal Agreement to MPs.

Writing in the Sunday Times, Theresa May revealed that the bill will be a ‘bold offer’.

However, it was reported on Monday that former Brexit secretary David Davis will be voting against the offer.

Commenting on the deal, Davis stated that if the deal is passed the next Prime Minister will ‘have their hands tied.’

The former Brexit secretary also urged Conservative MPs not to vote for May’s withdrawal deal which likely dampened sentiment in Sterling, leaving the pairing flat.

US-China Tensions Leaves New Zealand Dollar (NZD) Flat

On Monday China accused the United States of harboring ‘extravagant expectations’ for a trade deal.

This followed Google’s suspension of some business with Chinese telecoms giant, Huawei.

This may mean that future Huawei devices will not have access to Google apps and the Android operating system which could damage the company’s business outside of China.

Also adding to tensions, in the latest of a series of ‘freedom of navigation operations’, a US military warship sailed near the Scarborough Shoal Claimed by China in the South China Sea.

Meanwhile, in an interview aired on Fox News Channel, US President Donald Trump said that the US and China ‘had a very strong deal, we had a good deal, and they changed it. And I said ‘that’s OK, we’re going to tariff their products’.’

In response, Lu Kang, Chinese Foreign Ministry Spokesman said:

‘We don’t know what this agreement is the United States is talking about. Perhaps the United States has an agreement they all along had extravagant expectations for, but it’s certainly not a so-called agreement China agreed to.’

This likely dampened sentiment in the risk-sensitive ‘Kiwi’ as risk-appetite continued to remain fragile.

Pound New Zealand Dollar Outlook: Will a Surprise Jump in NZ Dairy Prices Buoy NZD?

Looking ahead to Tuesday, the New Zealand Dollar (NZD) could rise against Sterling (GBP) following the release of the Global Dairy Trade Price Index.

If dairy prices follow the recent trend and rise despite forecasts suggesting prices will slide, the ‘Kiwi’ could receive an upswing of support.

Also likely to cause movement of the pairing on Tuesday is the release of the UK inflation report hearings.

If the report reveals that the Treasury Committee is pessimistic and suggests inflation will struggle to meet the Bank of England’s target, it could cause the Pound New Zealand Dollar (GBP/NZD) exchange rate to fall.

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