GBP/NZD Exchange Rate Down as May’s Brexit Deal Receives Fresh Criticism
The Pound New Zealand Dollar (GBP/NZD) exchange rate is down today 0.5% today and is trading within the region of NZD$1.8919 as Prime Minister Theresa May’s Brexit withdrawal agreement is back in focus ahead of 9 January, when MPs are set to renew Brexit debates.
The Pound (GBP) was left generally unmoved by Theresa May’s New Year’s Eve address in which she urged MPs to back her Brexit withdrawal agreement, saying that if ‘Parliament backs a deal, Britain can turn a corner.’ May commented:
‘We have all we need to thrive and if we come together in 2019 I know we can make a success of what lies ahead and build a country that truly works for every one of us.’
The Pound (GBP) was also hit today by fresh criticism of Theresa May’s Brexit deal, with former Cabinet minister Sir John Redwood commenting that he has ‘fundamental objections’ to May’s deal and was ‘wobbling’ in his opposition to the UK-EU withdrawal agreement.
Labour leader Jeremy Corbyn also came under fire after a poll suggested that 72% of Labour loyalists are in support of a second-referendum, despite Corbyn’s insistence that Brexit will go ahead.
Labour MP Phil Wilson commented:
‘Labour’s leadership now has a huge opportunity to be at the front of a popular campaign against the government’s Brexit deal and make sure the public are given the right to have the final say in the form of a People’s Vote.
I urge Jeremy to seize this chance to change the course of history, before it’s too late.’
The New Zealand Dollar (NZD), meanwhile, has been inhibited by a lack of data releases over the holiday period, with ‘Kiwi’ traders instead focusing on developments overseas, including recent news that US President Donald Trump is considering an executive order to ban US companies using the Chinese tech giant, Huawei, which could potentially exacerbate US-China trade tensions.
Pound Sterling (GBP) Exchange Rates Fail to Benefit from Manufacturing PMI
The Pound also failed to reap any benefits from today’s publication of the UK Markit Manufacturing PMI figures for December, despite showing an unexpected increase to 54.2 against last month’s 53.6.
While the headline figure was positive, the report did detail some concerns, with IHS Director Rob Dobson commenting:
‘Stocks of purchases and finished goods both rose at near survey-record rates, while stock-piling by customers at home and abroad took new orders growth to a ten-month high. Any positive impact on the PMI is likely to be short-lived, however, as any gains in the near-term are reversed later in 2019 when safety stocks are eroded or become obsolete.’
NZD/GBP Exchange Rate Rises despite Weakening Chinese Economy
NZD investors, meanwhile, will be awaiting the release of today’s Global Dairy Price Index figures, with dairy products being New Zealand’s main export any signs of bullishness will further benefit the ‘Kiwi’.
The New Zealand Dollar had some of its gains clipped by recent news that China’s factory sector has contracted for the first time since 2016, with some traders fleeing NZD in favour of safe-haven currencies.
Analysts at the investment company, Moody’s, commented:
‘The drivers of China’s slowdown have yet to have their full impact on the economy, and the combination of both is unprecedented. . . This creates a high degree of uncertainty and risk.’
GBP/NZD Outlook: Brexit Back in Focus
The GBP/NZD exchange rate is likely to be driven by political factors rather than economic ones in the coming weeks, with Theresa May once again rallying to bolster support for her Brexit deal ahead of the mid-January vote.
NZD investors, meanwhile, will have their sights set on US-China trade developments into 2019, with any signs of increasing tensions weakening the NZD/GBP exchange rate.
GBP investors, meanwhile, will be looking ahead to Friday which will see a raft of UK data releases.
Tomorrow, however, will see the publication of the UK PMI Construction figures for December, with any ease of output potentially weakening the GBP/NZD exchange rate.
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