GBP/NZD Rises as New Zealand Observes Anzac Day

Despite a lack of impressive UK data, the Pound advanced against the New Zealand Dollar on Tuesday. New Zealand markets were closed due as the nation observed the Anzac Day holiday, making the ‘Kiwi’ easy pickings.

GBP/NZD opened this week at the level of 1.82. On Tuesday, the pair gained around a cent and hit a high of 1.84. This was GBP/NZD’s best level since July 2016.

Pound (GBP) Rises Against Weak NZD Despite Mixed UK Data

The Pound has remained generally firm this week so far. Britain’s data hasn’t been influential enough to weaken the currency and as a result, Sterling has been easily able to capitalise on weak rivals

Market optimism towards the upcoming UK general election has improved the Pound outlook.

Investors expect UK Prime Minister Theresa May will easily increase the Parliament majority of her Conservative party, potentially making it easier for the government to handle a smoother Brexit process.

This week’s UK data has been concerning in some ways however. CBI’s Monday factory report indicated that business optimism for Q2 2017 was well below expectations.

Tuesday’s public sector net borrowing data was also disappointing, as the UK government borrowed much more money in March than projected. Despite this, the 2016/2017 financial year had the lowest public borrowing since the financial crisis, which helped the Pound avoid losses.

New Zealand Dollar (NZD) Weakens as Risk-Sentiment Drops Again

Market-wide risk-sentiment was boosted on Monday after the first results of the French Presidential elections lightened ‘Frexit’ fears considerably. This allowed the New Zealand Dollar to push GBP/NZD down slightly from its weekend highs.

However, the risk-rally didn’t last long. During Monday’s American session, comments emerged from the White House that US President Donald Trump is looking to slash corporation tax from 35% to just 15%.
The potential of this big cut left markets more anxious in Tuesday trade.

New Zealand Dollar trade was already light on Tuesday, as Australian and NZ markets were closed while the nations observed the Anzac Day public holiday. As a result, Sterling easily gained against a weakened and unappealing ‘Kiwi’.

GBP/NZD Forecast: UK Growth Data Due Friday

The Pound to New Zealand Dollar exchange rate could sustain yet another week of gains if upcoming UK data is able to impress traders.

GBP/NZD trade on Wednesday and Thursday may be calmer due to a lack of fresh UK or NZ ecostats.

The main potential influences for the pair until Friday will be any further fluctuations in risk-sentiment. For example, if US President Donald Trump does indeed go into further detail on any of his tax plans, market appetite for risky currencies will worsen further.

Friday will see the publication of Britain’s key Q1 2017 Gross Domestic Product (GDP) projections, as well as a UK consumer confidence report from GfK.

During Friday’s Asian session, New Zealand’s March trade balance report and ANZ business confidence survey will be published. These are unlikely to improve New Zealand Dollar demand much however, unless risk-sentiment improves later in the week.