NZD/GBP: Risk of a downside break - Westpac

NZD/GBP continues to consolidate around 0.54, with arguably more risk of a downside break than a rebound, according to Imre Speizer, Research Analyst at Westpac.

Key Quotes

“PM May has survived her immediate post- conference leadership challenge, but remains vulnerable. Brexit talk tensions and a lowering of growth projections as the autumn budget approaches are likely to weigh on GBP.”

“The UK event calendar this week includes housing surveys, CPI/PPI (17th), labour data (18th), retail sales (19th), and public finances (20th).”

“3 months ahead: Medium term direction depends largely on whether the uncertainty from Brexit eventually causes a slowdown in activity. If so, NZD/GBP is likely to trade in the high 0.50s by year end. Alternatively, should the economy shrug off Brexit, then NZD/GBP could test the low 0.50s.”