Pound New Zealand Dollar Exchange Rate Attempts Recovery from Losses
The Pound New Zealand Dollar (GBP/NZD) exchange rate is attempting rebound today, after tumbling for most of the week. The Pound’s (GBP) advances are limited however, as the nation’s coronavirus lockdown could last into March.
Since opening this week at the level of 1.9034, GBP/NZD has been trending with a downside bias. The New Zealand Dollar (NZD) continued to climb until this morning, when GBP/NZD touched on a weekly low of 1.8631.
This meant GBP/NZD had shed most of the gains seen in recent weeks. At the time of writing though, GBP/NZD is rebounding and trending near the level of 1.8731.
GBP/NZD is a volatile exchange rate, so higher demand for the Pound could mean that a recovery is in sight.
Pound (GBP) Exchange Rates Attempting Rebound despite Underwhelming Data
Investors bought the Pound from its cheapest levels today. It comes as markets start to cool on Britain’s third coronavirus lockdown after pricing in the shock earlier in the week.
This week’s UK data hasn’t done much to improve Britain’s outlook. Key services sector PMI figures fell short of projections yesterday, and today’s UK construction PMI disappointed as well.
UK construction was expected to come in at 55, but instead printed at just 54.6.
It showed that the sector continued to grow, but analysts note that Britain’s outlook is still fairly gloomy. According to Analysts at Goldman Sachs:
‘Our estimates suggest that the hit from the latest restrictions will be notably smaller than in April (as factories remain open and activity has become less sensitive to restrictions) but somewhat larger than in November (as schools are closed).’
New Zealand Dollar (NZD) Exchange Rates Slip as Markets Digest US Political Chaos
The New Zealand Dollar is a currency correlated to market risk and trade sentiment. It is often driven by market sentiment, so hopes for recovery from the coronavirus pandemic have been buoying it higher lately.
Since last night though, markets have been jostled by political chaos in the US.
Rioters broke into the halls of US Congress in opposition of the result of the US Presidential Election, at the invitation of US President Donal Trump. It caused brief panic in markets over fears of an attempted coup.
However, the situation was eventually quelled. This morning, President-Elect Joe Biden’s election win was confirmed by Congress.
Market sentiment is mixed as the events are digested. This made it a little easier for the Pound to rebound against the New Zealand Dollar.
Pound New Zealand Dollar (GBP/NZD) Exchange Rate Focused on Sentiment amid Quiet Calendar
The Pound to New Zealand Dollar exchange rate is expected to move in relation to shifts in market sentiment over the coming sessions. A lack of notable UK or New Zealand ecostats due for publication leaves other factors the focus.
The Pound will of course remain sensitive to shifts in Britain’s coronavirus situation. If figures continue to worsen despite the lockdown, it could deepen concern about Britain’s outlook and lead to more Pound losses.
On the other hand, signs of improvement could be a relief to markets and help the Pound to recover.
Meanwhile the New Zealand Dollar will remain correlated to shifts in market sentiment. As the ‘Kiwi’ is typically volatile, uncertainty over politics and the pandemic could weaken the currency before the end of the week.
Looking ahead, Brexit deal relief could make it easier for the Pound New Zealand Dollar exchange rate outlook to improve.