GBP/NZD Forms Bearish Channel Amid Ongoing Brexit Uncertainty

GBP/NZD is moving in a bearish channel that started to form on Thursday. Reserve Bank of New Zealand (RBNZ) has published consumer spending data yesterday but the market is mainly driven by the latest Brexit events.

The pair has declined by half of a percentage point during the Asian trading session, currently trading at 2.0168 as of 06.01 AM UTC. The price action is still pointing downward, trying to touch the bottom line of the bearish channel.

Brexit Deadline Might Be Further Delayed

UK Prime Minister Boris Johnson reached an agreement with the European Union (EU) last week. But he couldn’t obtain the parliament’s vote at home, as the majority of MPs voted to withhold approval.

The British government stated that the UK would leave the EU on October 31 — the current deadline. This happened despite a letter that PM Boris Johnson was required by parliament to send to the EU requesting another delay.

The PM’s defeat on Saturday forced him to act according to a law passed by those opposing a no-deal Brexit, which demands him requesting a delay until January 31. Johnson has sent the letter to the EU as required, but he also sent another signed letter pleading against the delay, which he considers corrosive.

Michael Gove, the minister who leads no-deal Brexit preparations, told Sky News that the UK would still leave the EU on October 31:

“We are going to leave by October 31. We have the means and the ability to do so. […] That letter was sent because parliament required it to be sent… but parliament can’t change the prime minister’s mind, parliament can’t change the government’s policy or determination.”

This week is crucial for the UK, but the British pound might stay strong amid reduced concerns over a no-deal Brexit, which is still the least probable scenario.

NZ’s Credit Card Spending Falls Short of Expectations

In New Zealand, the RBNZ said that growth of Credit Card Spending slowed last month to 4.8% year-on-year after 6% in August, while analysts expected the indicator to increase to 5.1%.

The reading might put pressure on the country’s central bank, which is currently expected to cut the interest rate once again by the end of the year.

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