For much of the week the Pound New Zealand Dollar (GBP/NZD) exchange rate has plunged due to a weak pound. Additionally, a risk-on mood allowing the New Zealand Dollar to push higher.
But the Pound appears to be regaining traction as it heads into the weekend. A risk-off mood causes the New Zealand Dollar to lose its gains, with the GBP/NZD exchange rate currently trading at around NZ$1.9256.
The week has been disappointing for the Pound. But the UK’s hopes to recover from the coronavirus pandemic that will lead to international travel reopening for summer allowed the currency to start rebounding into the weekend.
TUI boss Friedrich Joussen was optimistic about the reopening of travel for summer holidays. He said he expected 75% of the TUI schedule to go ahead.
New data from the Office for National Statistics (ONS) has shown infections of coronavirus have dropped sharply to their lowest level since September 2020.
According to the report, Northwest England had the highest proportion of people of any region in England likely to test positive: around one in 260. Whereas, Southwest England had the lowest estimate: around one in 1,150.
Consequently, Pound investors are increasingly optimistic about the easing of lockdowns in England in the coming months. They are hopeful about the recovery of their economy.
NZD Exchange Rate Dips as US Dollar Rebounds
Despite the positive week for the New Zealand Dollar following dovish comments from the Federal Reserve, a rebound in the US Dollar today has caused the currency to dip.
The New Zealand Dollar had capitalised with a risk-on mood, for much of the week as the USD fell, though those gains are beginning to disappear.
Moreover, the most recent Business PMI from New Zealand exceeded expectations and indicated record growth, limiting losses.
The Antipodean currency is hoping to hold onto at least some of those gains heading into the weekend. A slew of data from the country is expected to drive movement next week.
Inflation Data in Focus
Next week, key inflation data released from both the UK and New Zealand mid-week will give investors insight. That is into how both economies are recovering from the COVID-19 pandemic.
Employment change and retail sales data which could also influence movement are also set to be released next week.
Over the weekend, the GBP/NZD exchange rate will continue to be driven by any further coronavirus developments. Meanwhile, Pound investors will monitor the cluster of South African variant cases of the virus to see if they can be contained.
- Trading Instrument