GBP/NZD Outlook: Risk Appetite To Remain In The Spotlight?
The Pound was muted against the New Zealand Dollar on Tuesday amid minimal economic data and an unclear market mood.
The Pound New Zealand Dollar (GBP/NZD) exchange rate was muted on Tuesday amid minimal economic data and an unclear market mood.
At time of writing, GBP/NZD traded at around NZ$2.2062, virtually unchanged from Tuesday’s opening rate.
The Pound (GBP) traded mostly flat against its peers on Tuesday as GBP investors awaited some mid-tier economic data, amid an absence of any significant UK releases.
The latest CBI distributive trades survey is forecast to show another decline in the index that measures retail sales volumes in the UK,
with the data expected to dip from -24 to -25 this month.
Should the data print as expected, GBP exchange rates could be undermined following the release.
The New Zealand Dollar (NZD) traded in a narrow range against the majority of its peers on Tuesday amid a lack of domestic data releases.
This absence in economic drivers left NZD exchange rates vulnerable to the ever shifting market mood.
As Tuesday bought with it an unclear appetite for risk, the ‘Kiwi’ was left trading without a key economic catalyst or a clear market mood, leaving NZD exchange rates to waver.
Looking ahead, the main driver of movement for the Pound New Zealand Dollar exchange rate looking ahead to Wednesday will likely continue to be market sentiment.
As Wednesday will bring with it another data-light economic calendar, the GBP/NZD exchange rate could be primarily impacted by market appetite for risk once again.
However, should markets turn upbeat trade moving into Wednesday, the GBP/NZD exchange rate could weaken on the New Zealand Dollar’s status as an acutely risk-sensitive currency.
Similarly, any move to downbeat trade could see the GBP/NZD exchange rate firm.
Adam Solomon
Contributing Analyst
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