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GBP/NZD Forecast: Pound New Zealand Dollar Exchange Rate Dips on RBNZ Interest Rate Decision

May 26, 2021 - Written by John Cameron

The Pound to New Zealand Dollar (GBP/NZD) exchange rate has dipped this morning as NZD finds support in the latest Reserve Bank of New Zealand’s (RBNZ) latest interest rate decision.

At the time of writing the GBP/NZD pairing are trading around the NZ$1.9356 level as the UK government awaits former government advisor Dominic Cummings coronavirus testimony.

Pound (GBP) Weakens on Coronavirus Concerns

The Pound has weakened against the New Zealand Dollar this morning as coronavirus woes continue to dampen the Sterling’s appeal.

Though those age 30-31 are now able to book for their coronavirus vaccine across the UK the fear of the Indian variant of the virus and the governments inquiry into the handling of the pandemic have done nothing to support GBP.

Former UK government aide Dominic Cummings is today giving a testimony regarding the government’s response to the pandemic.

Speaking this morning Mr Cummings’ has slated the government, once a trusted ally, he has become one of the Prime Ministers biggest critics:

‘The truth is that senior ministers senior officials, senior advisors like me fell disastrously short of the standards the public has a right to expect of its government in a crisis like this.’

‘When the public needed it most, the government failed. And I like to say to all the families of those who died how sorry I am for the mistakes that were made.’

New Zealand Dollar (NZD) Supported by New Zealand Interest Rate Decision

The New Zealand Dollar is being supported against many of its major rivals this morning following the latest interest rate decision from the RBNZ.

The bank chose to keep interest rates unchanged at 0.25% as expected, though a more hawkish outlook allowed the ‘Kiwi’ to soar.

Analysts an ING commented on the latest decision from the bank, and the press conference which signalled a rate hike in 2022:

‘The re-introduction of the OCR projections in the monetary policy statement signalled a clear (and surprising) shift to a hawkish bias. In a move that resembled that by the Bank of Canada in April, the RBNZ signalled a rate hike is expected in the second half of 2022.’

GBP/NZD Exchange Rate Outlook: UK Coronavirus Developments in Focus

A quieter economic calendar for the end of the week from both the UK and New Zealand will instead see investors focusing on any further coronavirus developments heading into the weekend.

Pound investors will look towards any news regarding the Indian variant of the virus and how it may damage the UK’s lockdown easing.

New Zealand Dollar traders will be focusing on the global market mood in the coming days, a resurgence in the US Dollar could see NZD weaken.

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TAGS: Pound New Zealand Dollar Forecasts

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