August 27, 2020 - Written by John Cameron
STORY LINK Pound to New Zealand Dollar (GBP/NZD) Exchange Rate Steady as ‘Kiwi’ Traders Monitor US Jackson Hole Symposium
GBP/NZD Exchange Rate Rangebound as NZ Announces Fresh Covid-19 Lockdowns
The Pound to New Zealand Dollar (GBP/NZD) exchange rate dipped today, with the pairing currently fluctuating around $1.990.
The New Zealand Dollar (NZD) held steady today ahead of the American Jackson Hole Symposium, with NZD investors paying close attention to announcements regarding the general performance of the world economy.
As a result, some ‘Kiwi’ traders are remaining cautious as they expect the global economic situation to deteriorate, with many leading banks likely taking a dovish stance on economic developments in the months ahead.
Meanwhile, NZD investors have become gloomier after New Zealand’s Government has announced fresh lockdowns to illuminate a cluster of Covid-19 infections. As a result, this has limited the ‘Kiwi’s gains as the economic impact of these new measures will hard the nation’s economic recovery.
Jason Wong, Senior Markets Strategist at BNZ Bank in New Zealand, commented:
‘If that is the modus operandi then, economically speaking, this could potentially be quite damaging and is clearly NZD-negative, a possibility that needs to be priced in.’
In New Zealand’s economic news, later this evening will see the publication of the ANZ – Roy Morgan Consumer Confidence figure for August. If this shows any signs of improvement, we could see the NZD/GBP exchange rate edge higher.
Today will also see the release of New Zealand’s Total Filled Jobs figure for July. Any signs of a recovery in the nation’s employment figure would prove NZD-positive.
Pound (GBP) Steady as UK Chief Negotiator Pushes for September Brexit Deal
The Pound (GBP) has continued to struggle following this week’s growing doubts over whether the UK can secure a post-Brexit trade deal with the European Union (EU).
However, David Frost, the UK’s Chief Brexit Negotiator, has pushed to secure a free-trade agreement by the end of September.
A Downing Street spokesman said:
‘Although there is still a lot of work to do, it remains our goal to reach an agreement and we’ll continue to work hard to do so.
‘We have tabled a consolidated text to try and inject momentum into the talks, and we want to quickly move into text based discussions as time is short, and there remains a lot of detail to work through.’
As a result, GBP investors have become more hopeful that the UK Government is beginning to take a more pro-active attitude to securing a post-Brexit trade deal before December 31st.
GBP/NZD Forecast: Could No-Deal Brexit Fears Drag Down Sterling Ahead of the Weekend?
Pound (GBP) investors will be awaiting tomorrow’s speech from the Bank of England’s (BoE) Governor, Andrew Bailey. Any dovishness about the British economy’s ability to recover in the short-term would drag down Sterling.
Meanwhile, New Zealand Dollar (NZD) traders will be paying close attention to global economic forecasts. If the Jackson Hole Symposium shows a dovish outlook on the whole, then we could see demand for risky assets like the ‘Kiwi’ suffer.
Sterling will also remain sensitive to Brexit developments this week. As a result, we could see the GBP/NZD exchange rate stumble on fears of a possible no-deal Brexit this year.
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TAGS: Pound New Zealand Dollar Forecasts