The Pound-New Zealand Dollar could come under pressure if UK GDP stalls, although a weaker New Zealand PMI may limit support for the Kiwi.
The Pound New Zealand Dollar (GBP/NZD) exchange rate retreated from Wednesday’s one-week high on Thursday, as the ‘Kiwi’ attracted some dip-buying.
At the time of writing, GBP/NZD traded at NZ$2.3172, down marginally from the previous day’s close.
DAILY RECAP:
After touching one-week lows against many of its peers on Wednesday evening, the New Zealand Dollar (NZD) managed to crawl up from its worst levels on Thursday.
The upside came from some dip-buying, as price-conscious investors sought to pick up a bargain on NZD.
Traders were also unperturbed by a mixed market mood, with the risk-sensitive currency able to recoup losses despite a broader lack of risk appetite.
Meanwhile, the Pound (GBP) found itself subdued on Thursday as the ongoing lack of UK economic data kept the currency confined to a narrow range.
Movement in Sterling was also muted by the looming UK GDP figures, with GBP investors seeming reluctant to alter their positions ahead of the week’s key economic release.
Near-Term GBP/NZD Forecast: Stalling UK GDP to Dent Sterling?
Looking ahead, the UK’s latest GDP figures are in focus for GBP investors on Friday.
Markets expect growth to have stalled in July. Such a lacklustre start to the third quarter could weigh on the Pound, as it would raise fresh concerns about the health of the British economy and potentially dampen Bank of England (BoE) interest rate hike bets.
As for NZD, New Zealand’s latest manufacturing PMI is due out on Thursday night. A decent reading could lend the ‘Kiwi’ support through Friday’s Asian trade session.
Risk appetite will likely also influence the currency, with the New Zealand Dollar potentially struggling if an anxious market mood prevails.
Our currency coverage draws on live market data, official economic releases and published bank research.
