🎯 GBP/NZD year-ahead forecast: Consensus targets from our survey of over 30 investment bank projections. Request your copy.

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The pound can advance further against the Kiwi if there's a 'sell the fact' market reaction to the RBA decision.

The GBP/NZD exchange rate starts the new week a solid three-quarters of a per cent in the red at 2.2721 as it pares some of the gains made over the course of the past two weeks.

For now, we view the losses as a setback within a consolidation-like recovery: the pair is catching its breath following the frantic selling pressures it came under during January and February.

In fact, we think there's scope for the relief move to head towards the 200-day moving average (MA) at 2.30, from where we would be inclined to take stock.

Near-term price action will be determined by the broader risk sentiment linked to the Iran conflict and a slew of central bank decisions lined up for the new week.

In general, the war has been associated with a recovery in GBP/NZD, and therefore, ongoing uncertainty paired with elevated energy costs owing to a gummed-up Strait of Hormuz should keep GBP/NZD downside limited.

Turning to the central banks, first up is the Reserve Bank of Australia's decision on Tuesday, which can impact the NZD via the 'antipodean channel' as often the NZD can track the behaviour of its trans-Tasman neighbour owing to perceived similarities and linkages in the two economies.

There's a chance that the AUD experiences a 'sell the fact' market reaction to an expected 25 basis point interest rate increase. The Aussie has travelled far and fast in 2026 as the market prices in up to three rate hikes from here.

It's quite hard to see that pricing rising much further and any note of caution by the RBA could see profits booked on the AUD rally, which can weigh on NZD.

Then there's Thursday's Bank of England decision to look forward to. GBP has recovered against the NZD and other major currencies through March as investors reversed expectations for up to two interest rate cuts this year to bet that the next move will be a hike.

Expect the Bank of England to strike a cautious tone Thursday, which should verify some of that repricing in rate expectations, which can keep sterling supported.

Rising oil and gas prices come at a time when UK inflationary pressures are starting to fade, although core inflation remains elevated and speaks of underlying structural inflationary risks in the economy.

"Before the onset of the Iran war and surge in energy prices, we had expected the BoE to cut rates at this meeting, with inflation set to approach 2% by April from the current 3%. But this has all changed due to much higher energy prices," says a market note from UniCredit Bank.