NZD/GBP Outlook:
The NZD/GBP is likely to decrease as it trades below its recent average and is near recent lows, with uncertainty in both economies weighing on the currency pair.
Key drivers:
• Rate gap: The Reserve Bank of New Zealand has maintained its interest rate steady, while the Bank of England faces mixed signals on rate policy amid economic concerns.
• Risk/commodities: A risk-off mood may push investors towards safer currencies, impacting the NZD negatively as it generally weakens in uncertain conditions.
• One macro factor: Recent UK services PMI results have raised concerns about the health of the British job market, adding to GBP uncertainty.
Range:
The NZD/GBP is likely to test the lower end of its recent range, with potential for further declines.
What could change it:
• Upside risk: A turnaround in global risk appetite could strengthen the NZD.
• Downside risk: Ongoing geopolitical tensions may further pressurize the GBP, intensifying declines in the NZD/GBP.
