Pound New Zealand Dollar (GBP/NZD) Exchange Rate Flat as ‘Kiwi’ Benefits from Return of Risk Appetite

June 27, 2019 - Written by John Cameron

STORY LINK Pound New Zealand Dollar (GBP/NZD) Exchange Rate Flat as ‘Kiwi’ Benefits from Return of Risk Appetite

GBP/NZD Exchange Rate Steadies as Hopes Rise on US-China Trade Deal

The Pound New Zealand Dollar (GBP/NZD) steadied today and is currently trading around NZ$1.900 on the interbank market.

The New Zealand Dollar (NZD) held steady against the Pound (GBP) as NZ markets have been bolstered with a return of risk-appetite ahead of tomorrow’s G20 meeting in Japan.

US President Donald Trump and Chinese President Xi Jinping are due to meet to discuss a possible trade deal.

Hopes are running high for a trade deal, however, with US Treasury Secretary Steven Mnuchin saying yesterday:

‘We were about 90% of the way there [with a deal] and I think there’s a path to complete this.’

Today meanwhile saw the publication of the ANZ Activity Outlook figures for June, which eased against May’s 8.5% to 8.0%.

ANZ Research were downbeat in their assessment, saying:

‘The outlook for the economy is murky. As things stand, there is no reason for the economy to fall into a deep hole. Commodity prices are good, interest rates are at record lows, and the labour market is tight. But the economy is facing credit and cost headwinds and the global outlook is deteriorating.’

GBP/NZD Exchange Rate Rangebound as Boris Johnson Says No-Deal Brexit Now a ‘Million-to-One’

The Pound steadied against many of its competitors today following reassuring comments from Boris Johnson, the current Tory leadership favourite.

Mr Johnson has showed signs of easing his hard-Brexit stance, saying that a no-deal Brexit is now a ‘million-to-one’.

Today also saw Tarō Kōno, the Japanese Foreign Minister, urge the two potential Prime Ministers – Foreign Secretary Jeremy Hunt and former London Mayor Boris Johnson – to avoid a chaotic exit from the European Union.

Mr Kōno said:

‘Whatever they do is up to the UK government, but we just don’t want to have a negative impact on the foreign companies in the United Kingdom, including the Japanese.’

With a lack of UK economic data today, the Pound has stabilised on easing Brexit uncertainty as no-deal fears begin to ease.

GBP/NZD Outlook: ‘Kiwi’ Could Rise on G20 US-China Trade Deal

Pound traders are looking ahead to tomorrow’s printing of the UK growth figures for the first quarter, which are expected to hold at 0.5%.

An increase, however, would bolster UK market confidence, and could see the GBP/NZD exchange rate rise.

Tomorrow will also see the publication of the UK GfK consumer confidence figures for June.

New Zealand Dollar investors, however, will be paying close attention to developments surrounding the G20 Summit.

Should US and China compromise on a trade deal, this would see the risk-correlated ‘Kiwi’ rise as traders would flock to riskier assets.

Conversely, however, a failure for the two superpowers to secure a deal would result in risk-off, with safe-haven currencies like the Euro and US Dollar benefiting instead.

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