The GBP to NZD exchange rate currently exhibits a bullish bias, bolstered by recent data from the Bank of England (BoE) signaling a slower pace for interest rate cuts.
Key drivers influencing this trend include the interest rate differential, as the BoE has indicated that future cuts will be a closer consideration, creating a positive environment for the pound. The Reserve Bank of New Zealand (RBNZ) is expected to cut rates further, negatively impacting the kiwi. UK retail sales figures may also provide support for the pound if they show growth.
In the near term, the GBP/NZD exchange rate is likely to trade within a stable range, reflecting recent highs. Upside risks could stem from stronger-than-expected UK economic data, while downside risks may arise from renewed concerns over the New Zealand economy or a shift in risk sentiment that favors the kiwi.