GBPNZD is lower by 0.30% on the day as the market awaits the latest inflation figures from New Zealand. Q-on-Q inflation is expected to rally from last month’s -0.5% figure to 0.9%.
Traders will be watching this closely after a recent run of positive data has them questioning whether the Reserve Bank of New Zealand can move to negative interest rates. The RBNZ still says that sub-zero rates are an option but some analysts are suggesting that it may be an empty threat, which is being used to keep Kiwi gains in check.
New Zealand’s economy has been boosted by strong data in manufacturing, retail spending, and house sales, which are showing a broad-based economic recovery. Year-on-year inflation is expected to climb to 1.7% from 1.5%. A strong or better than expected number could see the pound rally end, with sterling up almost 800 pips from the September 21st lows.
Britain and the EU will resume Brexit trade talks today with just weeks left to come to an agreement. The two sides have been blaming each other for the failure of talks at the EU summit last week and another week has been lost. This will have downside risk and is another reason why we could see support for the Kiwi.
GBPNZD Technical Outlook
The GBPNZD Pair has found resistance at the 1.9800 level and this could set up a bearish daily close ahead of the NZD inflation data. The 50-day moving average is around 1.9600 but the 1.9400 level is stronger support if we pull back. A stop loss at 1.9800 would be enough for shorts. The Investing Cube team is currently available to help all levels of traders with the Forex Trading Course or one-to-one coaching.