Pound Hits Ten-Year High Against New Zealand Dollar
The Pound to New Zealand Dollar (GBP/NZD) exchange rate reached a ten-year high on Monday, driven by persistent support for the Pound. At the time of writing, GBP/NZD was trading at NZ$2.3647, up nearly 0.3% on the day. This surge comes amid favorable economic indicators for the UK, including an upward revision to second-quarter GDP growth and rising expectations of a Bank of England (BoE) interest rate hike in November. Additionally, hopes of improved UK-EU relations following the Labour conference last week further bolstered Sterling's momentum.
The UK's finalised services PMI for September was revised slightly higher to 52.1, though still down from August's 52.5. This modest improvement helped maintain Sterling's upward trajectory. Meanwhile, the risk-sensitive New Zealand Dollar (NZD) faced challenges due to a gloomy market sentiment, fueled by concerns over high global energy prices and the ongoing crisis in the Middle East. The Strait of Hormuz saw near standstill activity on Monday following recent attacks near the vital waterway.
Looking ahead, the NZ Institute of Economic Research is set to publish its latest business confidence survey on Monday night. An improvement in the third-quarter confidence could provide some support to the 'Kiwi' during Tuesday’s Asian session and into European trade. Economic data is expected to thin out afterward, leaving GBP/NZD to be influenced by market risk dynamics. Shifts in sentiment, particularly regarding Federal Reserve interest rate expectations and US-Iran war news, could drive volatility in the exchange rate.