- GBP/NZD is going to be a busy pair this week
- RBNZ in focus and Boris Johnson heads to New York today for three days of talks with world leaders on Brexit and Iran.
GBP/NZD is going to be a busy pair this week and the recent price action suggests further upside to come, especially should Brexit sentiment continues to support the Pound and the Reserve Bank of New Zealand, to the contrary, continue to weigh on the outlook for the Kiwi.
GBP/NZD has started out the week following 10 consecutive day’s of positive closes, including Friday’s bearish pin bar which could be a spanner in the works on a technical basis for the near-term, encouraging longs to take profits ahead of the RBNZ this week. Indeed, the primary focus for this week will be Wednesday’s RBNZ OCR Review. “Market pricing for RBNZ is for 7bp of easing on 25 September, with a terminal rate of 0.57%,” according to analysts at Westpac:
“While we don’t expect a move next week, we still think that the RBNZ is inclined towards further easing. We expect another cut at the November Monetary Policy Statement, taking the OCR to a new low of 0.75%. Our view is that by that point, the cumulative stimulus from lower interest rates and increasing government spending will be enough to shore up the economy, get unemployment falling again, and set inflation on a path towards 2%.”
The Supreme Court is expected to deliver its decision this week
Meanwhile, Boris Johnson heads to New York today for three days of talks with world leaders on Brexit and Iran which is likely to derail a UK Supreme Court ruling on the prime minister’s decision to suspend parliament. However, headlines will likely flow considering Johnson is to meet leaders at the UN General Assembly including German chancellor Angela Merkel, French President Emmanuel Macron and US President Donald Trump. The Supreme Court, on the other hand, is expected to deliver its decision this week on whether Mr Johnson behaved lawfully in suspending parliament for five weeks.
GBP/NZD levels
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