The GBP/NZD exchange rate is a dynamic and complex entity influenced by a multitude of factors that can impact its value. As of the current market, Pound sterling is equivalent to 2.11 New Zealand Dollars. Despite the current downward pressure on the GBP/NZD exchange rate, there are several factors that could support the currency pair in the coming months.
Economic Health of the UK and New Zealand
The economic health of the UK and New Zealand is a significant driver of the GBP/NZD rate. The UK economy is currently growing at a slower pace than the US economy, which is supportive of the US dollar and puts downward pressure on the pound sterling. However, if the UK economy were to pick up speed, it could put upward pressure on the pound sterling and downward pressure on the GBP/NZD exchange rate. Conversely, New Zealand’s economy is growing at a faster pace than the UK economy, which is supportive of the New Zealand dollar and puts upward pressure on the pound sterling.
Trade Balance
New Zealand has an extremely robust trade sector, so currency traders and bank officials alike tend to watch changes in the country’s export and import levels. A widening trade deficit between the UK and New Zealand could put downward pressure on the pound sterling and upward pressure on the GBP/NZD exchange rate.
Monetary Policy
The Bank of England (BoE) and the Reserve Bank of New Zealand (RBNZ) use monetary policy tools to keep inflation in check. If either central bank were to raise interest rates to combat inflation, it could lead to a strengthening of the respective currency and impact the GBP/NZD exchange rate.
Political Events
Political announcements and natural disasters can cause severe variations within the GBP/NZD. For instance, the Brexit referendum had a significant impact on the GBP/NZD exchange rate, with the UK’s decision to leave the EU seen as a negative move for the country’s economy.
Commodity Prices
New Zealand is a major exporter of commodities, particularly dairy products. Fluctuations in commodity prices can impact the strength of the NZD.
Global Trade Dynamics and Geopolitical Events
Global trade dynamics and geopolitical events can cause volatility in the GBP/NZD pair. The ongoing trade war between the US and the UK, for instance, could have a significant impact on the exchange rate
Technical Outlook:GBP/NZD
GBPNZD was trading in a down trend for the last 3 weeks. It is trading at higher levels after breaking its 1.1050 resistance on July 30, 2024. Currently, if we look at the 4-hour chart, we can see a break out which can be seen breaking the trend line. The resistance which was formed in GBPNZD at 1.1050 has now become support. Hopefully a bull may come to test 1.1050. But if 1.1050 does not come down to test, then above 1.1130, targets up to 1.1170-1.1200 can be seen. Currently, GBPNZD remains in a bullish trend.
Key levels keep an eyes on:
Resistance levels
1 ] 1.1130
2 ] 1.1170
3 ] 1.1200
Support levels
1] 1.1050
2 ] 1.1000
3] 1.0950
Happy Trading!
Commodity Samachar
Learn and Trade with Ease
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