The GBP NZD exchange rate broke through the 2.1000 level for the first time since last November.
Foreign Currency Market Update – GBP / NZD Update
The GBP NZD exchange rate broke through the 2.1000 level for the first time since last November during last Friday’s session in the currency markets. The move higher for the pair was driven by a widespread shift out of higher-yielding risk-sensitive currencies including the Kiwi Dollar as investors’ fear levels crept up over concerns about the eurozone’s burgeoning debt crisis.
Friday afternoon’s assertion by EU Trade Commissioner Karel De Gucht that the European Commission and European Central Bank had made contingency plans for Greece’s exit from the euro saw appetite for risk amongst global investors hit a new near-term low, as evidenced by the downward lurch for stock indices across the world. Rumours that German Chancellor Angela Merkel had suggested to Greece’s President Karolos Papoulias that next month’s Greek elections should be turned into a referendum on whether the troubled Hellenic state should remain in the euro, heaped further pressure on the risk-sensitive New Zealand Dollar.
De Gucht’s words and the market whispers regarding a Greek referendum, ensured that the GBP NZD exchange rate registered its fifth consecutive week of gains last week, confirming a strong near-term upward trend. However, GBP NZD has given up a limited amount of these gains in early trading this week, thanks to this weekend’s comments from Chinese Premier Wen Jiabao which hinted that his country would be placing increased emphasis on generating economic growth moving forward, even if this caused domestic inflation to creep up. Wen’s words have seen global stock indices register healthy gains and triggered broad Kiwi strength today, sending the GBP NZD exchange rate back down into the 2.08s once more.
The GBP NZD exchange rate has made hefty gains in a relatively short space of time, so a near-term correction back towards the 2.00:1.00 level can not be ruled out. For this reason, clients needing to buy NZD in the short term may wish to consider taking care of half of their requirement whilst trading rates above 2.0500 are still available, in case the move lower for GBP NZD gathers momentum.
Summary of major upcoming data releases that we think may move the market.
- Pound Sterling to New Zealand Dollar Foreign Currency Exchange Rate Forecast
- Pound Sterling to New Zealand Dollar Foreign Currency Exchange Rate Forecast – Kiwi stabilises as stock markets rebound…
- Pound Sterling to New Zealand Dollar Foreign Currency Exchange Rate Forecast – Sterling give back recent gains
- New Zealand Dollar Foreign Currency Exchange Rate Forecast – Worse than expected contraction in the UK economy
- Pound Sterling to Australian Dollar Foreign Currency Exchange Rate Forecast – Sterling Plunges toward all time lows