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GBP/NZD Slips from Best Levels after Brexit Boost

Last week’s high: NZ$1.9837

Last week’s low: NZ$1.9091

Irish Border Uncertainties Knock Pound from Highs

The Pound to New Zealand Dollar exchange rate slipped from its best levels all year on Friday, as Pound investors became anxious that the UK and EU may not reach an agreement on how to handle the border between Ireland and Northern Ireland post-Brexit.

As both nations wish to keep a soft border (despite the UK now wanting a hard border with the rest of the EU) some UK MPs have suggested that a deal that works for everyone may not be possible.

However, Irish Foreign Minister Simon Coveney stated on Friday that he believed an agreement was doable, and hoped to see one reached before the EU summit on the 14th of December.

The New Zealand Dollar was boosted slightly at the end of the week due to slightly stronger demand for risk-correlated currencies. However, as recent New Zealand data has disappointed, its gains were limited and GBP/NZD was still up on the week’s opening levels.

NZD Outlook: Brexit Developments in Focus

Markets have been hoping for months that the first phase of Brexit talks would near an end before the close of the year, but if disagreements on the divorce process remain by the time of the EU summit, this could delay the outlook for the second phase well into 2018.

As a result, investors will be hoping for news suggesting that the UK and EU are closing in on agreements regarding the Irish border. If the Irish border remains an issue throughout next week, the Pound could plunge as markets worry about potential delays in Brexit talks.

Data is less likely to drive GBP/NZD next week. While Britain’s services PMI from Markit could be inspiring, Brexit news will be much more influential.

New Zealand Dollar exchange rates, meanwhile, could be influenced by next week’s Global Dairy Trade (GDT) auction, as well as NZ manufacturing sales data from Q3.

Key Events

4th December

09:30 UK Construction PMI

5th December

NZ Global Dairy Trade (GDT) Auction

09:30 UK Services PMI

8th December

NZ Manufacturing Sales

09:30 UK Balance of Trade

09:30 UK Manufacturing and Industrial Production

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To keep up to date with the New Zealand Dollar, visit the NZD blog in our Currency News section.

Joe Mayhew


Senior Currency Broker
T: 01442 892 060

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