GBP/NZD Outlook: Slightly weaker, but likely to move sideways, as the rate is just below its recent average and lacks a strong driver.
Key drivers:
- The Bank of England is cautious about further rate cuts, while the Reserve Bank of New Zealand has already eased its policy significantly, creating a widening gap that favors the NZD.
- Oil prices have shown recent volatility, which can impact the NZD given New Zealand's reliance on commodities.
- UK GDP growth is expected to slow, influenced by stagnant incomes and reduced public spending, adding pressure on the GBP.
Range: The GBP/NZD rate may hold in its recent range as both currencies face headwinds without clear catalysts for movement.
What could change it:
- An upside risk could emerge if economic data from the UK surpasses expectations, boosting the GBP.
- A downside risk is possible if ongoing trade tensions exacerbate, leading to a weakening of investor confidence in the GBP.