NZD/GBP: NZD to underperform, but plenty of uncertainty - ANZ
|Analysts at ANZ note that the GBP/USD is undervalued on a number of different measures, but Brexit uncertainty justifies that.
Key Quotes
“It is not about ‘economics’ right here. In fact, sterling failed to react to the BoE lifting its policy rate recently to 0.75%.”
“The deadline for exiting the EU is less than seven months away but no workable plan is yet in sight (and that plan would also need to be ratified by all 27 member states – which of course takes time).”
“The main sticking point for the withdrawal agreement appears to be the Irish border. Some compromise is going to be necessary, but there is no guarantee we will see that. A trade agreement seems much further away, but that is less of a pressing issue.”
“At the moment, the FX market is in limbo awaiting clarity (one way or the other). And so until we get that, GBP/USD (and probably by default NZD/GBP) is set to trade in a choppy range, jumping on each new headline.”
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers.