The GBP NZD exchange rate edged higher on Thursday as market sentiment turned neutral.
The British pound vs New Zealand dollar exchange rate has slumped as foreign exchange markets close for the weekend.
Of particular note has been the fact that Chancellor George Osborne has dropped any pretence of meeting a 2020 budget surplus after ‘Brexit’.
This face has only further dampened confidence in the sterling exchange rates going ahead.
As the latest Chinese Manufacturing PMI narrowly avoided slipping into contraction territory, instead stagnating at a neutral 50.0, the appeal of commodity-correlated currencies such as the New Zealand and Australian dollars improved on Friday morning.
With demand for the Pound still severely muted this saw the GBP/NZD exchange rate sliding further ahead of the weekend, lacking anything in the way of support.
The British pound failed to maintain its gains over the course of the day, on account of immense instability from the Conservative leadership campaigns and the shock talk of UK interest rate cuts as soon as August..
Although former London Mayor Boris Johnson was hotly tipped for entering the contest, his shock backing out sent the Pound rising before a sharp fall took over.
Although commodities and global stocks continue to rise, market sentiment turned neutral as safe-haven assets found support amid uncertainty regarding the fallout from Brexit.
The GBP NZD exchange rate edged higher as the Brexit selloff continues to ease.
However, the UK’s political upheaval is predicted to weigh on Sterling gains as inter-party divides add to trader uncertainties.
Below are the latest FX rates:
On Friday the Pound to British Pound exchange rate (GBP/GBP) converts at 1
The live inter-bank GBP-GBP spot rate is quoted as 1 today.
The live inter-bank GBP-USD spot rate is quoted as 1.249 today.
The live inter-bank GBP-AUD spot rate is quoted as 1.912 today.
NB: the forex rates mentioned above, revised as of 26th Apr 2024, are inter-bank prices that will require a margin from your bank. Foreign exchange brokers can save up to 5% on international payments in comparison to the banks.
Pound Sterling (GBP) Exchange Rates Continue to Edge Higher ahead of BoE’s Carney Speech
The political landscape in the UK is swiftly becoming unrecognisable as inter-party divisions widened following the UK’s vote to leave the European Union.
With Tory candidates putting themselves forward to replace recently resigned Prime Minister David Cameron, however, trader concerns have eased amid hopes the transition will be swift.
Until a leader emerges and triggers Article 50 of the Lisbon Treaty, however, uncertainty will continue to dampen investor confidence.
Despite all this, Sterling continues to appreciate thanks to a relief rally following the huge losses in the immediate aftermath of the Brexit vote.
NZD Exchange Rates Cool from Recent Highs amid Overvaluation Concerns
Over the past few days the New Zealand Dollar advanced versus many of its peers after a return to risk-on trade.
However, this prompted concerns that the Reserve Bank of New Zealand (RBNZ) will be forced into easing policy at the next available opportunity.
According to BNZ, the New Zealand Dollar is unlikely to be hugely impacted by Brexit given its loose ties with the UK.
‘For New Zealand we expect the economic impacts of Brexit to be limited (but most likely negative for meat exports and tourism operators – at the margin). Note that New Zealand’s goods exports to the United Kingdom (predominantly sheep-meat and wine) comprise 3.5% of total. Imports from the UK (mainly transport goods) make up just 2.7% of the aggregate. Short-term visitor arrivals from the UK represent 6.5% of overall arrivals. This highlights that New Zealand’s ties to Britain are dramatically less than they were back in the early 1970s, when the United Kingdom’s joining of the EEC (as EU took the form of back then) was a major ruction for New Zealand. New Zealand has, over the intervening decades, moved on, to be now increasingly integrated to the Asia Pacific region.’