GBP/NZD Outlook: Bearish, as the rate is below its recent average and near recent lows, pressured by economic warnings.
Key drivers:
- The Bank of England's cautious stance on rate cuts may weigh on the British Pound as GDP growth projections slow, raising concerns of a possible recession in the UK.
- Global trade tensions, particularly U.S. tariffs affecting UK exports, have led to reduced market confidence and could negatively impact the GBP.
- The New Zealand Dollar has benefited from a positive market mood recently, although ongoing concerns about export revenue due to New Zealand's shrinking private sector can impact its strength.
Range: The GBP/NZD is likely to hold within a narrow range as it trades close to recent lows, influenced by negative economic outlooks for both currencies.
What could change it:
- Upside risk: A surprise increase in UK economic data could boost the Pound.
- Downside risk: Further deterioration in the UK’s trade balance or escalated U.S. tariffs could weaken the GBP further.