The Pound-to-New Zealand Dollar exchange rate has thus far spent the fledgling week attempting to overcome the nearby 1.98 handle, a level above which its oxygen would begin to thin heading into a litany of key risk events for the Kiwi and Sterling.
The New Zealand Dollar is tipped to find itself better supported over the course of the coming week as buyers return to the currency in anticipation of higher interest rates at the Reserve Bank of New Zealand.
The New Zealand Dollar roared back into life on Wednesday, sending GBP/NZD into a tailspin as it topped the board among major currencies entering the mid-week session after the Reserve Bank of New Zealand (RBNZ) surprised the market with a ‘hawkish’ monetary policy report.
"We upgrade our forecast for the New Zealand dollar," says Georgette Boele, Senior Currency Strategist with ABN AMRO, the Dutch headquartered international investment bank and financial services provider.
The Pound is likely to struggle against the New Zealand Dollar over the short-term given the significant technical resistance in the market around current levels, however the mid-week Reserve Bank of New Zealand meeting is tipped by some market professionals to offer excitement.
The New Zealand Dollar can continue to rise owing to May's surprising shift in stance at the Reserve Bank of New Zealand according to Wall Street investment bank JP Morgan, but the FX research team at Barclays tell their clients they are expecting weakness in the currency over coming days.
The New Zealand Dollar has slipped through the major currency rankings already in recent months but now faces being further eclipsed as coronavirus-inspired sluggishness in some Asia Pacific currencies threatens to lift the trade-weighted Kiwi and hold back NZD/USD.