The GBP/NZD exchange rate has reached recent highs, trading at 90-day peaks near 2.2889, which is 1.5% above its three-month average of 2.2542. This movement reflects a stable range observed over the past months, fluctuating between 2.2262 and 2.2889.
The British Pound (GBP) has found some support due to better-than-expected GDP figures, indicating a 0.3% growth in the UK economy for the second quarter, surpassing forecasts set at 0.1%. However, analysts note that this growth marks a slowdown from the 0.7% seen in the previous quarter, potentially limiting Sterling's upward momentum. With thin economic data expected shortly, market sentiment towards the pound may lack clear direction.
A significant concern for the GBP is the recent policy shift by the Bank of England (BoE), which cut its interest rate from 4.25% to 4%, revealing internal divisions among policymakers. Observers are closely watching upcoming UK economic data, with expectations that weak labor market conditions could lead to additional rate cuts by December, raising the likelihood of further pressure on the pound.
Conversely, the New Zealand Dollar (NZD) has faced downward pressure amid a cautious market climate and the strengthening of the USD. Recent economic reports indicate rising unemployment in New Zealand, with rates reaching 5.2% in Q2, alongside declining employment figures. This backdrop supports expectations of a potential 25 basis-point rate cut by the Reserve Bank of New Zealand (RBNZ) in forthcoming meetings. Additionally, the imposition of U.S. tariffs on New Zealand exports has created further headwinds for the ‘kiwi’.
Global factors, such as the U.S. Federal Reserve’s anticipated policy adjustments, may also influence the NZD’s performance. The market is watching for developments in the Chinese economy, as positive trade data could bolster demand for New Zealand's exports, which are crucial for supporting the NZD.
Overall, analysts suggest that the GBP/NZD outlook remains influenced by both local economic indicators and broader global market sentiments. The interplay of interest rates, inflation expectations, and trade dynamics will continue to shape the exchange rate in the near future.
