The Pound has rallied against the NZD during Wednesday afternoon trading, following some significant comments made by the EU’s chief negotiator Michel Barnier.
Barnier indicated that he was close to offering the UK a post Brexit deal, which would be unique and unlike any other partnership the EU currently has with another country.
These comments caused a huge surge in support for Sterling, which has been crying out for some positive news of late. The Pound has seen its value diminish over recent weeks and despite the problems facing the New Zealand economy due to the recent slowdown in global trade, it was until today, threatening to make a move back under 1.90 against GBP.
Whilst Barnier’s comments have yet to be expanded upon or fully clarified, they certainly seem to have lifted investors’ confidence and their risk appetite for Sterling has increased significantly over the past few hours.
Whether this spike will continue over the coming days may well depend on any follow up comments that are made by Barnier and others but for now the Pound can at least enjoy its moment in the sun.
Looking at the NZD and it will be interestintying to see whether Business Confidence figures released overnight on Thursday can help the NZD curb any potential further losses. The commodity-based currencies, which include the NZD have struggled ever since President Trump introduced his trade tariffs.
The New Zealand economy relies heavily on its exports to Australia & China. Therefore, the slowdown in Chinese Industrial Production has caused investors to shy away from the NZD, thus causing its value to fall.
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