Pound To New Zealand Dollar Week Ahead Forecast: GBP Strikes Seven-Week Low

The Pound to New Zealand Dollar (GBP/NZD) exchange rate fell to a seven-week low last week as improving global risk appetite boosted demand for the risk-sensitive ‘Kiwi’.

At the time of writing, GBP/NZD was trading around NZ$2.2832, down almost 0.8% on the week.

WEEKLY RECAP:

The Pound (GBP) struggled to find clear direction for much of last week, leaving Sterling vulnerable against stronger risk-sensitive currencies.

Trading conditions were subdued early in the week before mixed domestic and political factors influenced movement in Sterling.

The UK’s final services PMI for April was revised higher, signalling stronger activity in the services sector, but political uncertainty ahead of the local elections limited support for the Pound.

The elections were widely viewed as an important test for Prime Minister Keir Starmer’s leadership.

Current councillor changes show Labour down 202 seats, the Conservatives down 61, while Reform UK added 270 councillors. The Liberal Democrats gained 29 seats and the Greens added 23.

Although Labour suffered substantial losses, markets judged the outcome to be less damaging than initially feared after Starmer pledged to remain Prime Minister, helping Sterling stabilise later in the week.

Meanwhile, the New Zealand Dollar (NZD) strengthened sharply as improving hopes for a diplomatic breakthrough between the US and Iran boosted market sentiment.

Comments from US President Donald Trump suggesting progress was being made towards a final agreement helped fuel demand for higher-risk currencies such as the ‘Kiwi’.

NZD also found support after New Zealand unemployment unexpectedly declined, reinforcing confidence in the domestic economy.

Improving risk appetite helped the New Zealand Dollar climb to a seven-week high against Sterling before gains moderated towards the end of the week.

GBP/NZD Forecast: UK GDP and New Zealand Data in Focus

Looking ahead, the UK’s preliminary first-quarter GDP figures are likely to be the main focus for Sterling investors.

If economic growth accelerated as expected, the Pound could regain some ground. However, weaker-than-forecast data may place renewed pressure on Sterling.

For the New Zealand Dollar, business inflation expectations and PMI data could influence direction later in the week.

Any signs of slowing economic momentum in New Zealand may weigh on NZD sentiment.

Broader market risk appetite is also likely to remain a major driver for GBP/NZD, with developments in the Middle East continuing to influence volatility.