The Pound’s (GBP) broad weeks-long rally seems to be taking a pause for now, and the Pound Sterling to New Zealand Dollar (GBP/NZD) exchange rate is tumbling as a result. The market outlook for the New Zealand Dollar (NZD) continues to improve.
After opening this week at the level of 1.9190, GBP/NZD briefly attempted to advance. However since the middle of the week the pair has been falling and has been thus far unable to recover.
At the time of writing on Friday morning, GBP/NZD is trending near a low of 1.8948. This is the worst level for GBP/NZD since the beginning of February, over three weeks ago.
Next week will be fairly quiet for economic data, but developments in the coronavirus pandemic will remain key to both Pound (GBP) and New Zealand Dollar outlooks.
Investors are adjusting positions on the Pound as February draws to an end. After Sterling saw a rocketing rally for most of the month, markets are now taking a pause on this bullish movement to take profit from a month of gains.
Some analysts note the Pound has likely been overbought in recent weeks. Its movement in the second half of this week is likely a correction, at least in part.
Another reason for the Pound’s weakness today could be a rout in global markets that occurred yesterday. As US government bond prices dropped, the yields on these bonds surged.
This led investors to sell shares and risk-correlated assets as they looked for safer investments. As Sterling has been fairly correlated to risk-sentiment lately, it likely weighed on Sterling as well.
Written Author from investing
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