The Pound to New Zealand Dollar (GBP/NZD) exchange rate climbed back above the NZ$2.34 handle last week as a cautious market mood weighed on risk-sensitive currencies.
Pound to New Zealand Dollar (GBP/NZD): 2.33816 (-0%)
Euro to New Zealand Dollar (EUR/NZD): 2.03013 (-0%)
New Zealand Dollar to Dollar (NZD/USD): 0.57317 (+0%)
DAILY RECAP:
The New Zealand Dollar (NZD) faced steady pressure last week as heightened geopolitical uncertainty left investors wary of higher-yielding and risk-sensitive assets.
Market sentiment deteriorated following the US military intervention in Venezuela, renewed rhetoric around US territorial ambitions for Greenland, and the seizure of a Russian-linked oil tanker, developments which collectively dented appetite for risk.
These headwinds largely overshadowed a handful of more supportive factors for the ‘Kiwi’, including its positive correlation with the Australian Dollar and encouraging PMI data out of China.
The Pound (GBP) began the week on a firmer footing after Prime Minister Keir Starmer hinted at a potential policy recalibration, suggesting the UK could pursue closer alignment with the EU single market where it serves the national interest.
Investors welcomed the comments amid hopes that reduced post-Brexit frictions could help support UK growth and investment.
However, Sterling struggled to sustain its early gains after UK services sector activity for December was revised lower, reinforcing concerns about the underlying resilience of the British economy.
With little fresh UK data to offset the disappointment, the Pound drifted through the latter half of the week, strengthening against risk-sensitive peers like the New Zealand Dollar but underperforming against safer currencies.
Near-Term GBP/NZD Forecast: UK GDP to Test Sterling Support
Looking ahead, the Pound to New Zealand Dollar exchange rate could face renewed pressure with the release of the UK’s latest monthly GDP figures.
Economists expect November’s data to show the economy contracted for a third consecutive month, a result that would likely strengthen expectations for further interest rate cuts from the Bank of England in 2026.
Such an outcome could sap Sterling sentiment and leave GBP/NZD vulnerable to a pullback.
Meanwhile, the New Zealand Dollar is likely to remain highly sensitive to shifts in global risk appetite, leaving the ‘Kiwi’ exposed to further losses if geopolitical uncertainty remains elevated.
