Image © Adobe Images
Further gains by the pound-New Zealand dollar exchange rate are anticipated as war escalation risks and the RBNZ decision loom.
GBP/NZD rises to 2.3229 this Tuesday, marking an important point in its 2026 journey: it has recouped 78.6% of the year's loss.
The pair sits comfortably above its major moving averages, with the RSI pointing higher, confirming momentum is with the buyers.
We see nothing in the chart to defy the trend and wouldn't stand in the way of further gains until 2.3288, which is the start of the consolidation zone that guards the 2026 high at 2.3455. Note, that the peak can be approximated to two similar peaks in 2025, suggesting this is a very difficult level to surmount.
Those with GBP into NZD payments should ensure their payment provider is offering orders and strategy points to ensure you achieve maximum returns on your transfer. Learn more here.
The turning point for NZD in 2026 is the war in the Middle East, which highlighted New Zealand's vulnerability to global oil disruptions.
- Partner alert: Horizon Currency says its research shows it is delivering up to NZ$1,400 more on a GBP/NZD transfer than typical banks. More information on this here.
Like Australia, New Zealand relies on Asian refiners for the provision of fuel. These Singaporean and South Korean refiners, meanwhile, rely on oil supplies from the Middle East, which have, of course, been effectively strangled by Iran.
New Zealanders will be hoping for some good news in the first half of the week as Iran faces a deadline from the U.S. to reopen the Strait.
Our suspicion is that Iran won't comply, but will do enough to prompt President Donald Trump to extend the deadline. We think this only prolongs the troubles and adds to NZD weakness.
So in a three-way scenario analysis, two outcomes are NZD-negative, which is a handy way of plotting GBP/NZD's path.
Don't forget that tonight the RBNZ delivers its latest policy update.
The market does not expect any change in the cash rate at this meeting. Following on from Governor Breman's speech last week, the RBNZ's communication is likely to reaffirm the Bank's reluctance to respond impulsively to the Middle East conflict.
The Reserve Bank will indicate the economy is still operating below capacity.
"This should challenge the market's pricing of more than 75bps of hikes this year," says a note from TD Securities.
The rule of thumb is that this would amount to a 'dovish' interpretation of the RBNZ's guidance, which would typically result in NZD weakness.
However, TD Securities says it will scan the Minutes for any signs the RBNZ may consider shifting its stance in favour of bringing forward hikes earlier. That would amount to a 'hawkish' outcome that would prompt the NZD to rally.