Exchange Rate Calculator

The exchange rate between the British Pound (GBP) and the New Zealand Dollar (NZD) has experienced notable fluctuations over the past few months, influenced by various economic indicators, monetary policies, and market sentiments. This report provides an in-depth analysis of the GBP/NZD currency pair, examining recent trends, underlying factors, and potential future movements.

Recent Performance of GBP/NZD

As of March 24, 2025, the GBP/NZD exchange rate stood at 2.2508, marking a slight increase from the previous day's close of 2.2500. Over the preceding month, the pair exhibited a range between 2.1929 and 2.2759, indicating moderate volatility. Notably, on March 20, 2025, the pair reached a high of 2.2639, reflecting a 0.70% increase from the previous day.

Technical Analysis

Technical indicators have provided mixed signals for the GBP/NZD pair. On March 17, 2025, the Relative Strength Index (RSI) was at 26.708, suggesting the pair was in oversold territory. Additionally, the Moving Average Convergence Divergence (MACD) indicated a bearish trend with a value of -0.004.

Conversely, by March 20, 2025, the RSI had risen to 77.345, indicating overbought conditions, while the MACD turned positive at 0.004, suggesting a potential bullish momentum. These contrasting signals highlight the pair's volatility and the importance of monitoring technical indicators closely.

Fundamental Factors Influencing GBP/NZD

Several fundamental factors have impacted the GBP/NZD exchange rate:

1. Monetary Policies:

• Bank of England (BoE): The BoE has maintained an accommodative monetary policy, keeping the base rate at 0.1% since March 2020 and expanding its quantitative easing program to £895 billion. This dovish stance aims to stimulate economic activity but may exert downward pressure on the GBP.

• Reserve Bank of New Zealand (RBNZ): In contrast, the RBNZ unexpectedly cut interest rates by 25 basis points in August 2024, bringing the Official Cash Rate (OCR) to 5.5%. This move was aimed at supporting economic growth amid recessionary concerns but led to a depreciation of the NZD.

2. Economic Indicators:

• United Kingdom: The UK's GDP contracted by 0.1% in Q2 2023, raising concerns about a potential recession.

• New Zealand: New Zealand's GDP grew by 1.7% in the same period, indicating a more robust economic performance.

These divergent economic trajectories have influenced investor sentiment and the relative strength of the GBP and NZD.

3. Inflation Rates:

• UK: Inflation rates have remained subdued, allowing the BoE to maintain its accommodative stance.

• New Zealand: Inflation has been within the RBNZ's target range, but concerns about economic growth have prompted rate cuts.

Forecast and Outlook

Analysts have provided varying forecasts for the GBP/NZD pair:

• Short-Term: Some forecasts suggest a potential increase to 2.321 within a year, representing a 3.15% gain.

• Long-Term: Projections indicate a possible rise to 2.612 by 2030, implying a 16.09% increase over five years.

However, these forecasts are subject to change based on evolving economic conditions, monetary policies, and global market dynamics.

Conclusion

The GBP/NZD exchange rate has been influenced by a complex interplay of technical indicators, monetary policies, and economic fundamentals. While technical analysis provides insights into potential short-term movements, fundamental factors such as central bank policies and economic performance play a crucial role in shaping the long-term trajectory of the pair. Investors and traders should remain vigilant, considering both technical signals and fundamental developments to make informed decisions in the dynamic forex market.