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Pound Sterling New Zealand Dollar (GBP/NZD) Exchange Rate Flat After Suspected Oil Tanker Attacks in Gulf of Oman

June 13, 2019 - Written by John Cameron

Pound New Zealand Dollar (GBP/NZD) Exchange Rate Flat as Investors Flock to Safe-Haven Currencies

The Pound Sterling New Zealand Dollar (GBP/NZD) exchange rate remained muted and the pairing is currently trading at an inter-bank rate of NZ$1.9312.

On Thursday, suspected attacks on two oil tankers in the Gulf of Oman caused investors to jump into safe-haven currencies.

The cause remains unclear but the incident comes just a month after four oil tankers were attacked off the UAE.

This likely increased longstanding tensions between the US and Iran, and caused global risk-appetite to take a hit.

Commenting on this, CEO of Sun Global Investments, Mihir Kapadia said:

‘Tensions in the Middle-East have been rising since President Trump withdrew from the Iran deal last year.

‘Although US National Security Adviser John Bolton has accused Iran of a similar incident before, the country has distanced itself from today’s attacks.

‘From this, the biggest concern will be a retaliation which could leave markets looking shaky in the meantime, with Iran potentially being met with more severe sanctions which could really affect its oil output and economy if found guilty.’

Sterling (GBP) Muted as Commons Reject Labour’s Attempt to Block No-Deal

Today Conservative MPs are voting in the first round of the Tory leadership contest to select a new party leader.

A secret ballot is being held in the House of Commons and a result is expected after 13:00BST.

Any of the 10 contenders that are unable to secure at least 17 votes will be eliminated in this round.

Meanwhile, on Wednesday evening MPs voted to reject Labour’s plan to take control of Parliament’s timetable.

The House of Commons opposed the move by 309 to 298 votes.

This likely dampened sentiment in Sterling as it increased the risk of the UK crashing out of the European Union on 31 October.

US-China Trade Tensions Leave New Zealand Dollar (NZD) Flat

On Thursday, China’s Commerce Ministry stated that it would not yield to any ‘maximum pressure’ from the United States.

It noted that any attempt by Washington to force Beijing to accept a trade deal will fail.

Speaking to reporters at a regular briefing, Ministry Spokesman Gao Feng said China would not make concessions on matter of principle.

Heightened trade tensions between the US and China likely dampened sentiment in the risk-sensitive ‘Kiwi’, leaving the pairing flat.

Pound New Zealand Dollar Outlook: Could a Dovish Carney Weigh on GBP?

Looking ahead to this evening, the New Zealand Dollar (NZD) could rise against the Pound (GBP) following the release of the Business NZ PMI.

If May’s PMI rises higher than forecast, it could provide an upswing of support for the ‘Kiwi’.

Meanwhile, on Friday afternoon the pairing could slip following a speech from the Bank of England’s (BoE) Mark Carney.

If the BoE Governor comments on monetary policy and his tone is overly dovish and focuses on the risk of a no-deal Brexit, the Pound New Zealand Dollar (GPB/NZD) exchange rate could slump.

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