The Pound New Zealand Dollar (GBP/NZD) exchange rate narrowed on Thursday, as the latest UK GDP figures for the third quarter printed below preliminary figures.
At the time of writing, GBP/NZD traded at around NZ$1.9188, showing little deviation from Thursday’s opening rates.
The Pound (GBP) weakened against most peers on Thursday, as the final third quarter GDP data printed below expectations and pointed to further economic slowdown.
With recession fears stoked by the news that QoQ GDP data had fallen to -0.3%, below forecasts of -0.2%, investors grew more concerned about the economic health of the country.
In a similar manner to the New Zealand Dollar, a strong risk-on mood across Thursday’s session may have allowed the increasingly risk-sensitive Pound to escape deeper losses as the UK’s economic outlook continued to deteriorate.
The New Zealand Dollar (NZD) traded narrowly on Thursday, as decreasing confidence has stoked concerns that the country may be headed towards a deeper recession that initially forecast.
Wednesday saw the release of December’s ANZ consumer confidence survey, which printed at the lowest results since the survey began in 2004, and followed Monday’s Westpac quarterly survive which also reported record lows.
However, underpinning the ‘Kiwi’ during Thursday’s session was a clear appetite for risk among investors. With the New Zealand Dollar being a risk-sensitive currency, further losses may have been prevented by this upbeat mood.
Looking ahead for the Pound, a lack of macroeconomic data may shift investor attention towards domestic headlines in the UK.
With industrial action continuing to intensify and the cost-of-living crisis continuing to affect households in the run up to the holiday season, any further headlines outlining strikes or this impact may weaken Sterling.
Furthermore, any further news from UK businesses about either Brexit or the recession’s impact on profits and growth may also serve to contribute to a souring sentiment towards the Pound.
For the New Zealand Dollar, a similar picture is expected. With a lack of economic data, investors may look to domestic headlines in New Zealand. With the country now expecting to enter a recession, further news of how this may take shape could dent the ‘Kiwi’.
Furthermore, due to New Zealand’s close trading links with China, any further news about Chinese Covid cases may also weigh on NZD.
Elsewhere, risk appetite could send the risk-sensitive ‘Kiwi’ on the upswing, while also serving to buoy the increasingly risk-sensitive Pound.
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