GBP/NZD Outlook:
Bearish, as the rate is below its recent average and near recent lows, pressured by UK political uncertainties.
Key drivers:
• The Bank of England is adopting a more dovish stance, potentially leading to lower interest rates.
• The New Zealand dollar is facing challenges from a cautious market mood, reducing demand for the risk-sensitive currency.
• Introduction of tariff lifts on New Zealand food exports could support the NZD, but global trade tensions may offset positive impacts.
Range:
Expect the GBP/NZD to hold near its recent lows, with limited movement likely within the 3.8% range observed.
What could change it:
• Upside risk: A surprise improvement in UK economic data could bolster the GBP.
• Downside risk: Further deterioration in global risk appetite could keep the NZD on the defensive.