Pound to New Zealand Dollar Exchange Rate Gains on Back of UK GDP
February 12, 2021 - Written by John Cameron
STORY LINK Pound to New Zealand Dollar Exchange Rate Gains on Back of UK GDP
The Pound to New Zealand Dollar exchange rate was gaining this morning as a modest growth in UK GDP at the end of 2020 supported Sterling.
At the time of writing the pair is currently trading at around NZ$1.9181.
Pound (GBP) Supported By Better-Than-Expected GDP Growth
The Pound found itself mixed today but gaining against NZD as UK GDP data from Q4 revealed that the economy had grown 1% at the end of 2020, leading to hopes that the UK will avoid a double-dip recession.
Despite a modest growth in the fourth quarter of 2020, overall UK GDP fell 9.9% over the course of the year, the worst decline seen in 300 years.
Chancellor of the Exchequer Rishi Sunak commented on the decline in annual GDP, saying:
‘Today’s figures show that the economy has experienced a serious shock as a result of the pandemic, which has been felt by countries around the world. While there are some positive signs of the economy’s resilience over the winter, we know that the current lockdown continues to have a significant impact on many people and businesses.’
‘That’s why my focus remains fixed on doing everything we can to protect jobs, businesses and livelihoods.’
New Zealand Dollar (NZD) Losses Limited as Coronavirus Vaccines Arrive Early
Whilst the New Zealand Dollar lost traction overnight as risk aversion increases and the US Dollar (USD) regains strength, losses were limited as news arrived that New Zealand will start vaccinating its population a month earlier than expected.
The country, which has so far been criticised for its slow acquirement of vaccines, will now be able to start vaccinations as early as next Saturday, almost a month before vaccines were supposed to arrive into New Zealand.
Prime Minister Jacinda Arden said:
‘Government representatives have been in conversations with Pfizer on a constant basis for the last few weeks. We appreciate the effort the company has gone to deliver the first instalment earlier than originally anticipated.’
‘Last year we indicated the vaccine would arrive in quarter two, and earlier this year we updated that to quarter one. It’s pleasing to be receiving doses this early in quarter one.’
Pound to New Zealand Dollar Outlook: UK Inflation Data in Focus
Over the weekend the Pound to New Zealand Dollar exchange rate will continue to be dictated by any further coronavirus developments. With the UK on course to vaccinate 15 million of the most vulnerable of the population by Monday, the Pound could be bolstered if the target is reached.
Pound investors will look to next week’s inflation data releases, with a slowdown in inflation forecast year-on-year Sterling could suffer losses.
New Zealand Dollar traders will keep an eye on global risk aversion in the coming days, and the continued strength of the US Dollar.
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