Currency News

Daily Exchange Rate Forecasts & Currency News

GBP to NZD Exchange Rate Hits 2020 Worst Ahead of Reserve Bank of New Zealand (RBNZ)

June 23, 2020 - Written by James Fuller

Despite today’s stronger than expected UK data, the British Pound to New Zealand Dollar (GBP/NZD) exchange rate has continued to tumble. The pair may not see much reason to climb in the coming days either, as markets remain optimistic about New Zealand’s outlook and remain anxious about coronavirus and Brexit uncertainties weighing on the Pound.

While the Pound has held its ground against some other major currencies this week, GBP/NZD has kept tumbling. Last week saw notable GBP/NZD losses as the pair fell from 1.9460 to 1.9269, shedding almost two cents overall.

This week’s movement has been a little more modest so far, but the pair is still recovering notable losses overall. At the time of writing on Tuesday afternoon GBP/NZD is trending near a low of 1.9142 - the worst level for the pair all year. Specifically, it was the worst level for GBP/NZD since September 2019.

Looking ahead, New Zealand Dollar investors will be highly anticipating tomorrow’s Reserve Bank of New Zealand (RBNZ) policy decision.

GBP Exchange Rates Fails to Strengthen despite Forecast-Beating PMIs

Investors remained hesitant to buy the Pound today, despite this morning’s UK data generally coming in much better than expected.

Britain’s June PMI projections were published this morning, giving investors the clearest idea yet of how Britain’s economy is handling the coronavirus pandemic this month.

Britain’s key services sector recovered from a dire 29.0 contraction in May to a 47 contraction in June. Manufacturing was even more impressive, unexpectedly jumping to growth of 50.1 according to the projections.

The overall composite print rose from 30 to 47.6 rather than the expected figure of 41.

Some analysts noted that the recovery in activity did not necessarily indicate the hoped v-shaped recovery. However, Thomas Pugh from Capital Economics said that businesses responding to the survey were comparing activity to normal activity rather than the pandemic slowdown.

He said:

‘The nature of the PMIs makes them tricky to interpret at the moment, but the rise in the composite PMI from 30.0 in May to 47.6 in June (consensus 41.0) suggests that the further easing in the lockdown on 15th June has led to a further rebound in economic activity after the sharp fall in April.

Taken literally the fact that the flash composite PMI remained below the no-change level of 50 in June suggests that activity fell further as it should compare activity to the previous month. But many respondents appear to be comparing activity in June to its normal level. So the rise in the composite PMI suggests that activity continued to recover in June, but that it is still well below normal.’

NZD Exchange Rates Resilient despite Brief Rise in Trade Jitters

Yesterday saw US-China trade war jitters briefly jump again, as a White House official said that the trade deal was ‘over’.

However, this panic was short-lived and the comments quickly walked back and clarified.

White House officials continue to maintain that the first phase of the trade deal will remain in place. Analysts expect it will remain in place for the US election later in the year as well.

Investors are overall optimistic about the global economic outlook, due to hopes that economies will continue to recover from the coronavirus pandemic.

This is helping to support the New Zealand Dollar, as investors continue to be willing to take risks. Optimism over New Zealand’s own handling of the coronavirus crisis is also helping the ‘Kiwi’ to remain strong.

GBP/NZD Exchange Rate Forecast: Optimistic RBNZ Could Further Boost NZD

The Pound remains under pressure due to Britain’s uncertainty-filled coronavirus and Brexit outlooks. Meanwhile, the New Zealand Dollar is seeing limited strength due to mixed market risk-sentiment.

However, general optimism over the global coronavirus recovery and New Zealand’s handling of the pandemic is likely to keep the New Zealand Dollar buoyed.

What’s more, the New Zealand Dollar could be in for even further strength in the coming days if tomorrow’s Reserve Bank of New Zealand (RBNZ) decision impresses investors.

While the bank is not expected to make any changes to monetary policy or quantitative easing (QE), the bank’s tone will still be closely watched. If the RBNZ is more optimistic about New Zealand’s economic outlook, the New Zealand Dollar could see even more gains.

Amid a lack of notable UK data due in the coming days, global coronavirus developments and RBNZ news will be the focus for Pound to New Zealand Dollar exchange rate investors in the coming sessions.
Like this piece? Please share with your friends and colleagues:

International Money Transfer? Ask our resident FX expert a money transfer question or try John's new, free, no-obligation personal service! ,where he helps every step of the way, ensuring you get the best exchange rates on your currency requirements.

TAGS: Pound New Zealand Dollar Forecasts

Comments are currrently disabled