GBP/NZD Outlook:
The GBP/NZD pair is slightly positive, but likely to move sideways as it trades near its recent average while heavy geopolitical concerns weigh on the NZD. The recent prediction by ANZ suggests GBP support if the RBNZ eases sooner than the BoE.
Key drivers:
• Rate gap: The Bank of England's recent rate outlook is more stable compared to the RBNZ, which faces pressure to cut interest rates.
• Risk/commodities: Rising oil prices could benefit the GBP as market odds for a BoE rate cut have significantly reduced.
• One macro factor: New Zealand's limited economic data may leave the NZD vulnerable if geopolitical tensions persist.
Range:
Expect GBP/NZD to hold within its recent 3-month range, possibly testing the upper extremes.
What could change it:
• Upside risk: A stronger-than-expected UK service sector report could boost GBP.
• Downside risk: Continued geopolitical concerns could further weaken the NZD.