NZD/GBP vulnerable to further downside – Westpac

NZD/GBP cross is vulnerable to retesting the recent low at 0.5145, suggests Imre Speizer, Research Analyst at Westpac.

Key Quotes

“The key focus next week will be the Budget on Wed. It is critical not only for the Govt.’s self imposed fiscal goals (2% deficit by 2021, balanced by mid-2020’s) but the survival of May’s Govt. due to mounting political pressures domestically and around Brexit. A successful Budget could relieve some pressures with a sound fiscal hand, support struggling parts of the population and strained public departments (NHS, education, security, et al,) and even allow for a firmer approach towards Brexit.”

“3 months ahead: Medium term direction depends largely on whether the uncertainty from Brexit eventually causes a slowdown in activity. If not, then NZD/GBP could test 0.50.”