The pair has slightly declined by 0.05% since the European session began. Nevertheless, the flat move is enough to break the support line of an uptrend that started on October 10.
GBP/NZD is now trading at 2.03 as of 05.13 AM UTC.
The sideways trend might continue for a while until the market decides which way to go. The 9-day moving average has broken below the 25-day moving average for the first time since the rally started.
Hopes for a Brexit Deal Still Persist
The Brexit deal seemed to be so close yesterday, with only a few conflicting messages to disturb hopes, but they still persist.
The Brexit will be in the spotlight during the European Union leaders’ summit that starts today. There seems to be a strong determination on both sides to finally seal the deal and end the exit saga that has made the headlines for over three years.
The British pound has been sensitive to every rumor and news related to Brexit negotiations, which has changed the mood several times this week.
The keys are now in the hands of the Democratic Unionist Party (DUP), the Northern Irish political party that might veto a potential deal. In the case of a deal, the UK Prime Minister Boris Johnson has to win the approval of a House of Commons, where he has no majority. This is why Johnson needs several votes from the DUP as well.
For this, he has to convince the party that Northern Ireland will end up in an advantageous situation, with the Irish border being at stake. At the moment, it is not clear how much the DUP agrees with Johnson’s stance.
DUP leader Arlene Foster dismissed an earlier report that claimed the party had reached an agreement with Johnson. The negotiations are currently ongoing.
Kit Juckes, head of currency strategy at Societe Generale, commented:
“It looks like a deal is being worked on but everyone who works with the EU knows that these deals happen at the last minute. It seems more likely than not that we will need an extension.”
All in all, the end of the week could be quite volatile for the GBP/NZD pair.
|What do these figures mean?|
|When measuring the value of a pair of currencies, one set equals 1 unit and the other shows the current equivalent. As the market moves, the amount will vary from minute to minute.
For example, it could be written:
1 GBP = 2.03 NZD
Here, 1 GBP is equivalent to approximately 2.03 NZD. This specifically measures the Pound worth against the New Zealand Dollar. If the NZD amount increases in this pairing, it’s positive for the GBP.
Or, if you were looking at it the other way around:
1 NZD = 0.49 GBP
In this example, 1 NZD is equivalent to approximately 0.49 GBP. This measures the New Zealand dollar’s worth versus the British Pound. If the GBP number gets larger, it’s good news for the NZD.