The current market bias for GBP to NZD is range-bound.
Key drivers include:
- The Bank of England is projected to cut interest rates as inflation decreases, while the Reserve Bank of New Zealand is also expected to lower rates, but potentially at a slower pace.
- Economic growth in both the UK and New Zealand is expected to slow, adding pressure on their currencies.
- Recent fiscal concerns in the UK may lead to further weakening of the pound.
In the near term, GBP to NZD is expected to continue trading within a stable range, reflecting recent movements.
An upside risk is if global economic conditions improve significantly, prompting a boost in commodity prices, which could favor the Kiwi. Conversely, a downside risk is political uncertainty or economic setbacks in the UK, which could lead to further pressure on the pound.