Currency - GBP / New Zealand Dollar

Sterling’s weakness is the driving factor in the Sterling - NZ Dollar exchange rate. The Kiwi Dollar is being buoyed by Asian market confidence and by the lure of New Zealand’s 2.5% base rate. Investor confidence, whilst relatively buoyant in America and Asia, is at rock bottom as far as Europe is concerned and the Pound is suffering from that malaise. You can see that pattern very clearly in the dive from NZ$2.08 to the Pound in mid December to just NZ$ 1.92 today. This decline has been relatively orderly, within a fairly obvious trading channel but it is a decline nonetheless. From a technical perspective, there is little to stop this pair hitting NZ$ 1.91 in the days ahead and it may even get to the same low that we saw in September and October around NZ$ 1.89. If however, we do finally see the Pound rediscover its backbone, the top of this channel at NZ$ 1.97 is the obvious target.