Recently, we have mentioned GBP/NZD several times in terms of the increases that would occur after a win, according to surveys, of the Conservative Party in the UK. The victory was impressive, but the reaction of the markets was large but short-lived. Not surprising, because the political problem has been solved, but now the markets can start pricing the costs of leaving the community.
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Even today there will be a meeting of the Bank of England, where interest rate cuts may be mentioned, which would further weaken the Pound. It has gone quite high in recent months, so there is plenty to fall from. From New Zealand, on the other hand, the situation is reversed and a possible reduction in interest rates is denied. When the wedge was broken, the price quickly returned to key support and breaking it may create a new downward trend. On W1 we are close to the 2018 maximum, so we are really high.
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