While it remained well above last week’s worst levels, the Pound to New Zealand Dollar exchange rate fell on Monday as Brexit concerns took hold of GBP trade.
At the time of writing the pound to New Zealand dollar exchange rate is seen higher on the day at the 1.79095 level, having fallen sharply over the course of Monday's session.
Sterling investors were concerned that the Brexit process could end without access to the EU’s single market and that many businesses would leave Britain as a result.
GBP/NZD lost around half a cent in value on Monday and could fall further on Tuesday if 2016’s final Global Dairy Trade (GDT) auction result is a good one for prices of New Zealand’s most lucrative commodity.
The latest New Zealand data has weakened the GBP/NZD exchange rate after building upon the positivity generated by other strong weekend releases.
Sunday’s Westpac consumer confidence index for the fourth quarter rose to 113.1, the performance of services index climbed to 57.9 and building permits rose 2.6%; today the ANZ activity outlook has climbed to 39.6 while the business confidence measure has risen to 21.7.
The Pound New Zealand Dollar exchange rate rose steadily over the previous week, but Sterling was repeatedly dented in demand by inflation fears.
As well as concerns mounting about inflationary pressures in 2017, the Bank of England (BoE) also left the door open to a possible rate cut or hike at its next meeting.
Despite a few setbacks, the Pound was able to steadily appreciate against the New Zealand Dollar last week, rising from a starting rate of 1.76 on Monday to 1.77 on Friday.
New Zealand Dollar to Pound Rate Worsened on Limited Data and Falling Business PMI
The New Zealand Dollar Pound exchange rate saw a progressive deterioration over last week, not least because the data on offer was extremely limited
Wednesday saw a business NZ PMI drop from 55.1 to 54.4 instead of an expected rise, while a Fed interest rate hike later on also triggered a loss for the NZD.
The New Zealand Dollar gradually deteriorated in value against the Pound last week, dropping from 0.567 to 0.562.
Pound New Zealand Dollar Forecast: Slump Predicted on UK GDP Stats
Given the variety of data on offer, the New Zealand Dollar is broadly expected to be stronger than the Pound in the coming week.
On the UK side, the major announcements will consist of decline-forecast distributive trades on Tuesday, as well as an expected expansion in public sector borrowing on Wednesday.
Closing the week on what may be a low note will be the Q3 finalised GDP results, which are expected to show a slight rise on the year but a converse dip on the quarter.
From New Zealand, the week’s major data will start early, with Sunday’s Westpac consumer confidence for Q4 expected to rise from 108 to 109.46.
Further support may come from Monday’s ANZ business confidence (expected to rise) as well as the global dairy trade price index due on the same day.
Less positively, the Q3 GDP growth rate stats are set to dip; these are expected over Wednesday.
Key Events to Watch for the NZD in the New Week
The NZD-impacting events in the next seven days include the Building Consents (Source), the Westpac Consumer Sentiment (Source), the ANZ Business Confidence (Source), the FPI, the GDT Price Index (Source), the Trade Balance, the Visitor Arrivals, the Credit Card Spending (Source), the GD and the Current Account.
Latest Pound/ NZ Dollar Exchange Rates
On Friday the Pound Australian Dollar (GBP/AUD) exchange rate is seen in the region of 1.939, while the Australian Dollar Pound (AUD/GBP) exchange rate was quoted at 0.516.