GBP/NZD exchange rate flounders as Brexit fear resurfaces
- UK markets closed amid broad optimism that the Conservative Party win would be able to push a softer Brexit.
- Reality hit the GBP and left the GBP/NZD exchange rate outlook much lower.
- Fresh Brexit developments in less than a week after the elections have caused fresh panic in the British markets.
Last week, the UK markets closed amid broad optimism that the Conservative Party win would be able to push a softer Brexit. But, yesterday, reality hit the GBP and left the GBP/NZD exchange rate outlook much lower.
Last week the GBP/NZD climbed from 2.0000 to 2.0215, even briefly touching on a 2019 high of 2.0403 on Thursday night.
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However, since Monday, when the markets opened, the GBP/NZD has quickly shed those gains to fall even lower.
On Wednesday, the GBP/NZD was trending near a weekly low of 1.9944.
The GBP may be in for further bearing if the UK government doubles down on it hard Brexit stance.
Meanwhile, the anticipated New Zealand growth rate report might considerably influence the NZD outlook.
The GBP exchange rates unappealing after hard Brexit fears resume
Last week, investors piled into the Pound amid the hopes of a Conservative Party win leading to a softer Brexit.
In fact, hopes for a softer Brexit has been among the primary causes of the Pound’s strong performance in the last few weeks.
However, fresh Brexit developments in less than a week after the elections have caused fresh panic in the British markets. Prime Minister- Boris Johnson has indicated that he will attempt to rule out an extension to the Brexit transition period.
The move would force the transition period to end by Dec 2020- come-what-may.
The news led to a surge in the fears that a hard Brexit was still a high possibility, and that a year of another Brexit uncertainty was inevitable.
GBP/NZD exchange rate awaits Brexit and New Zealand growth news
Market fears continue to weigh on the Pound heavily ahead of 2020, which is likely to be filled with Brexit uncertainties.
However, for now, investors are eagerly waiting for further details about government plans.
The UK government may push for Brexit plans though the UK Parliament over the coming week, before Christmas.
On Thursday, we’ll see the publication of retail sales results and growth rate stats to follow on Friday.
On Thursday, we’ll also see if the Bank of England will hold its December policy decision.
If the bank continues to focus on Brexit uncertainty despite the new Conservative majority government, the Pound could see further pressure.
However, upcoming New Zealand data could be highly influential for the New Zealand Dollar outlook.