GBP/NZD Signals & Technical Analysis
About the GBP/NZD (British pound sterling and New Zealand dollar)
The GBP/NZD pair is the abbreviated term used for the British pound sterling and New Zealand dollar. This pair does not have a nickname. Before we get into the particulars, what exactly does the GBP/NZD rate mean? The exchange rate tells you how many New Zealand dollars (the quote currency) are required to purchase one British pound sterling (base currency). For example, if the pair is trading at 1.98, it means it takes 1.98 New Zealand dollars to buy 1 British pound sterling.
Breaking Down ‘GBP/NZD’
The pound sterling, commonly known as the pound and less commonly referred to as sterling, is the official currency of the United Kingdom and is also known as GBP. The pound sterling was commodity money or bank notes backed by silver or gold, but it is currently Fiat money, backed only by the use of as little as possible in the areas where it is taken. The pound sterling is the world's oldest money still in use, which has been used in ain unbroken stretch use since the start.
Whereas, the New Zealand dollar (NZD) is the currency of New Zealand. NZD is made up of 100 cents and this currency is officially represented by the symbol $ or NZ$ to set it apart from other currencies based in dollars. We can use this currency in Cook Islands, Niue, Tokelau, and the Pitcairn Islands. This currency’s nickname is kiwi and the reason behind this is the national bird found stamped on the one- dollar coin. The decimalization of the currency took place in 1967 when the New Zealand dollar replaced the New Zealand pound at a rate of two dollars to one pound.
The British Pound vs. the New Zealand Dollar pair is one of the most active ones among GBP pairs. The New Zealand Dollar is often viewed as a proxy for Chinese growth and thus have performed well against the pound in recent years. But on the other hand, the British Pound is one of the premier reserve currencies and shows the world's largest financial center.
What Determines the GBP/NZD Exchange Rate?
Several factors can impact the GBP/NZD rate valuation, including:
The Bank of England (BoE) is the central bank of the United Kingdom. It has a broad range of duties and responsibilities as well, compared to those of most central banks around the world. It acts as the government's bank and the lender of last resort. It issues currency and, most importantly, it oversees monetary policy.
The Reserve Bank of New Zealand or RBNZ is the name of the central bank of New Zealand. Its main objective is to maintain the stability of New Zealand's financial system, Apart from this, it is also responsible for maintaining the monetary policy, meeting the currency needs of the public and providing support services for other banks in the country.
The movement in British and New Zealand economic events determine the exchange rates. Top of the line economic events include GDP, Employment Change, Industrial Production, and Consumer Price Index. Better than forecast data increases the demand for related currency and impacts the value of either the Great British Pound or the New Zealand dollar, causing fluctuations in the GBP/NZD exchange rate.
Major Economic Events:
Gross Domestic Product – The Gross domestic product is the central measure of economic growth in the region.
Employment Change – Both currencies are sensitive to changes in employment, as slacks in the labor market cause a drop in Inflation rates.
Consumer Price Index – Since one of the goals of the BOE and RBNZ is to maintain price stability, they keep an eye on inflation indicators such as the CPI. If the annual CPI deviates from the central bank’s target, the RBNZ or the BOE could make use of their monetary policy tools to keep inflation in check.
Trade Balance – New Zealand has an extremely robust trade sector, so currency traders and bank officials alike tend to watch changes in the country’s export and import levels.
Political announcements & natural disasters – Besides the scheduled economic events, political elections, new systems, wars, terror incidents, natural calamities, etc. can all cause severe variations within the GBP/NZD
Standard lot Size: 100,000 Mini lot size: 10,000 Price minimum increment: 0.00001 Pip Value: $6.30