NZD/GBP: Risk of a downside break? - Westpac

NZD/GBP continues to consolidate around 0.54, with arguably more risk of a downside break than a rebound, suggests Imre Speizer, Research Analyst at Westpac.

Key Quotes

“Both the NZD and GBP have political headwinds, the latter hurt by PM May’s vulnerability, explaining the current stalemate in the cross. The UK event calendar this week includes Halifax housing survey (6th), and Aug. ind. prod., trade data and GDP (10th).”

“3 months ahead: Medium term direction depends largely on whether the uncertainty from Brexit eventually causes a slowdown in activity. If so, NZD/GBP is likely to trade in the high 0.50s by year end. Alternatively, should the economy shrug off Brexit, then NZD/GBP could test the low 0.50s.”