Pound-New Zealand Dollar could stay elevated if risk appetite remains weak, although stronger NZ business confidence may offer the Kiwi some support.
The Pound New Zealand Dollar (GBP/NZD) exchange rate hit a fresh ten-year high on Monday as Sterling continued to attract support.
At the time of writing, GBP/NZD traded at NZ$2.3647, up almost 0.3% on the day.
Pound to New Zealand Dollar (GBP/NZD): 2.362863 (+0.20%)
Euro to New Zealand Dollar (EUR/NZD): 2.004679 (+0.03%)
New Zealand Dollar to Dollar (NZD/USD): 0.559005 (-0.43%)
DAILY RECAP:
The Pound (GBP) continued to attract support at the start of this week, following last week’s impressive gains.
The recent upward revision to UK GDP growth in the second quarter, increased bets on a Bank of England (BoE) interest rate hike in November, and hopes of closer UK-EU ties following the Labour conference last week all continued to provide the Pound with support.
In addition, the UK’s finalised services PMI on Monday was revised slightly higher. The PMI printed at 52.1 in September, still down from August’s 52.5 but above the preliminary estimate of 51.7. While the upward revision was modest, it helped keep Sterling’s momentum alive.
Meanwhile, the risk-sensitive New Zealand Dollar (NZD) struggled as this week’s session began, with a gloomy market mood weighing on NZD demand.
Investors remained concerned about high global energy prices and the ongoing crisis in the Middle East.
Activity in the Strait of Hormuz came to a near standstill on Monday, following attacks near the vital waterway over the weekend.
Near-Term GBP/NZD Forecast: NZ Business Confidence to Support the ‘Kiwi’?
Looking ahead, the NZ Institute of Economic Research will publish its latest business confidence survey on Monday night. A forecast improvement in the third quarter could lend the ‘Kiwi’ support during Tuesday’s Asian session and into European trade.
Economic data then thins out, likely leaving GBP/NZD to be driven by market risk dynamics. Any shifts in sentiment could drive volatility. Federal Reserve interest rate expectations and US-Iran war news could determine the market mood.
Our currency coverage draws on live market data, official economic releases and published bank research.
