The GBPNZD was lower on Monday and the pair has a bearish tone ahead of Kiwi jobs numbers. The figures will be released after the day’s close and the market is expecting a Q-on-Q unemployment change of -0.8%. The unemployment rate is expected to come in at 5.4% versus last month’s 4%.
Any improvement on those numbers would see a move higher in the Kiwi currency after the pound was hit yesterday on news that the U.K. would be joining France and Germany with a one-month lockdown. The news was unwelcome for the U.K.’s fragile recovery and it also ensures that further stimulus will be coming from the Bank of England.
In Australia, the troubled state of Victoria has now gone four days without any new virus infections, while the country as a whole had its first virus-free day in five months. The situation is similar in New Zealand with only two cases registered yesterday at a quarantine facility and the news gives hope that the two countries can see a strong economic recovery and continue with their plan for restarting flights.
Brexit talks are continuing into midweek after a full weekend of talks and time is running down for a deal with only nine weeks to agree and ratify a deal. If the talks break down then an estimated US$900 billion of trade in goods and services could be hit with tariffs from January 1st under the WTO system. This keeps an event-risk premium on the Kiwi and, alongside the new lockdowns, could see further lows ahead for the pound.
GBPNZD is trading below the 1.9500 level after failing at the 50-day moving average. The bearish bar yesterday suggests further lows and the key support levels are 1.9450 and 1.9100. Traders can go short with a stop loss at 1.9600. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.