Yesterday’s high: NZ$1.9445
Yesterday’s low: NZ$1.9319
Pound Advances on Brexit and Budget Hopes
Despite poor UK data for most of last week, reduced demand for risk-correlated currencies made it easy for the Pound to New Zealand Dollar exchange rate to advance. The pair was able to hold most of last week’s gains on Monday as Sterling firmed on market expectations for the week’s upcoming news.
While there are likely to be clashes in the UK government on the Brexit ‘divorce bill’, more senior officials have shown a willingness to raise the divorce bill offer in order to speed up UK-EU Brexit negotiations.
Markets are also anticipating UK Chancellor Philip Hammond’s Autumn Budget, which will be delivered on Wednesday. Analysts speculate that Hammond will offer some relief to UK consumers after months of higher inflation and slower wage growth have caused a ‘pay squeeze’.
NZD Outlook: Dairy Price News Ahead
Pound trade is likely to remain focused on Brexit and Budget news in the coming days. Any signs of progress on the Brexit ‘divorce bill’ would likely lead to a surge in Sterling, and the Pound could also be buoyed if the Budget impresses investors.
The second November Global Dairy Trade (GDT) auction could also affect GBP/NZD today. As dairy is New Zealand’s most lucrative commodity, an increase in dairy prices could strengthen the ‘Kiwi’.
However, if markets continue to find risk-correlated currencies unappealing the New Zealand Dollar may remain weak against the Pound.
09:30 UK Public Sector Net Borrowing
NZ Global Dairy Trade Price Index
UK Autumn Budget
NZ Retail Sales
09:30 UK Growth Rate
NZ Balance of Trade
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Senior Currency Broker
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