GBP/NZD – ForexGBPNZD
Dollar, Euro. Great British Pound, Japanese Yen, and other global currencies such as Swiss Francs, Australian Dollars, New Zealand Dollar, and Canadian Dollar.
The exchange rate of the Great Britain Pound against the New Zealand Dollar is shown by GBP/NZD, where GBP is the base currency, and NZD is the quote currency. The combination of GBP and NZD is a minor pair, and also called a ‘cross pair.’ The GBP/NZD pair is not traded widely in the global markets but is a focus of Forex trading in the U.K. and New Zealand. The government of the U.K. shares a long, mutual partnership and trading relationship with New Zealand.
The GBP/NZD pair shows how many New Zealand Dollars will be needed to buy one Pound. For instance, if the current exchange rate of GBP/NZD is 1.93, it means 1 GBP equals 1.97 NZD, or we can also say that a trader would need to pay 1.93 New Zealand Dollar to buy 1 Great Britain Pound. The GBP/NZD pair is considered a niche pairing but can be selected to diversify an investment portfolio. The value of the GBP/NZD pair depends on the economic health and political stability of the U.K. and New Zealand.
History of GBP/NZD Currency Pair
Great Britain Pound is one of the oldest and also the most commonly traded currency in the world. The U.K. is considered as the sixth-largest economy of the world with exports that include refined fuel, food, beverages, chemicals, and finished goods, while imports include machines, pharmaceuticals, and mineral fuels. The GBP has seen a series of fluctuations since the decision of UK’s population to leave the European Union (EU) in the 2016 to actually leaving the EU in January 2020.
The Pound has been used as a means of transaction since the Anglo-Saxon period. The sterling silver coin was introduced in 1552, while the gold coins were introduced in 1663. The silver coins were used for imports, and the gold coins were used for exports. The Bank of England (BOE) was established in 1964, and paper money was also launched. Great Britain Pound became a free-floating currency in1971.
New Zealand is an economically stable country and known for its agricultural goods with a wide range of dairy products, wood, seafood, and machines. The Pound was the national currency of New Zealand before the New Zealand Dollar was introduced in 1967. The New Zealand Dollar is also known as ‘Kiwi’ as it represents the natural bird of New Zealand. Apart from physical goods, every year New Zealand is voted as the top-ranked and most beautiful places to visit. The beauty of New Zealand is documented in many international movies, and tourism is also a major source of income for the government of New Zealand.
The GBP/NZD pair reached the maximum value of 3.71 in September 1992 while the minimum value ever recorded was 1.64 in July 1976
How to Trade GBP/NZD Pair
As a trader, among other options you can trade the EUR/NZD pair using Contracts for Difference (CFDs), which allows you to speculate on the price change of the underlying asset without the need to own the currency pair. With CFDs, you can use leverage, which means by depositing a smaller amount in your trading account, you can trade a larger position and increase the chance of maximizing your profits but also losses. You can consider a risk management tool such as stop loss to minimize the risk of high losses.
Trading GBP/NZD pair through CFDs also gives you the option to trade in both directions, which is going long or short. If you believe that the GBP would rise in value in the coming days as compared to New Zealand Dollar, then you would go long or Buy, and conversely, if you think that the GBP would fall in value as compared to New Zealand Dollar, then you would go short or sell.
How to read the Price Change in GBP/NZD Pair
The GBP/NZD pair is considered to quite a volatile pairing as the daily price movements can reach 200 to 350 points, which provides a significant opportunity for short term traders to speculate the price movements and have the possibility to potentially profit in a short period of time. If the GBP/NZD rate declines, it shows that NZD has gained value against the GBP, and if the GBP/NZD rises, it means that the NZD has depreciated against the GBP.
The ticker for the Euro exchange with New Zealand Dollar is denoted by GBP/NZD in the Forex market. If we examine the price chart of the GBP/NZD pair, we note a relatively high value of 2.094 on April 2, 2020. However, there has been a downward trend since then, and the market has seen a downward trend with low of 1.938 on June 8, 2020, but currently, the GBP/NZD trades at even lower value of 1.9202. The Bid price is 1.92035, while the Asked price is 1.91983.
What causes price change in the GBP/NZD pair?
The GBP/NZD pair is not considered to be a widely traded currency pair, but like every other currency pair, the GBP/NZD pair also sees tight spreads and periods of volatility, which can be an attractive option for an experienced investor. The GBP/NZD pair is not suitable for novice traders but can be used as a tool for diversifying the portfolio of a veteran trader.
The main macro-economic factors that affect the pricing of the GBP/NZD pair includes
- The global oil prices,
- Trade balance between the U.K. and New Zealand
- The value of Pound after the U.K. officially leaving the European Union (E.U)
- The E.U monetary policy; and
- Other economic indicators such as interest rates, inflation, Gross Domestic Product (GDP) Consumer Price Index (CPI) and employment rate.
The UK Pound is the fourth most traded currency in the world and also one of the most expensive currencies. The value of GBP depends on the monetary policies put forward by the Bank of England (BOE) that also controls the interest rates, inflation, GDP level, and employment rate.
The Reserve Bank of New Zealand (RBNZ) controls the monetary policy in New Zealand that affects the individual value of NZD and also the GB/NZD pair. As the economy of New Zealand is commodity-driven, the fluctuation of prices in the commodities market influences the value of NZD. The RBNZ takes aggressive steps when it comes to interest rates, and New Zealand is set to operate on the highest interest rates as compared to other developed countries. The value of NZD is also affected by changes in the weather pattern, and a long term unfavorable weather forecast can decrease the value of NZD. Being a neighbor and trade partner of Australia, the macro-economic factors of Australia also influence the value of NZD.
The information above is for education purposes only and cannot be considered as investment advice. Past performance is not reliable indicator of future results.
Available Forex CFDs on R1investing
|EURUSD||Euro vs. US Dollar||24H||Buy Sell|
|GBPUSD||Great Britain Pound vs. US Dollar||24H||Buy Sell|
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|NZDUSD||New Zealand Dollar vs. US Dollar||24H||Buy Sell|
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|EURNZD||Euro vs. New Zealand Dollar||24H||Buy Sell|
|GBPAUD||Great Britain Pound vs. Australian Dollar||24H||Buy Sell|
|GBPJPY||Great Britain Pound vs. Japanese Yen||24H||Buy Sell|
|GBPNZD||Great Britain Pound vs. New Zealand Dollar||24H||Buy Sell|
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