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The British pound's bullish run against the New Zealand dollar is consolidating, yet we still see fresh highs as a matter of time.
The Pound to New Zealand Dollar exchange rate has spent October pinned beneath 2.3668, but the trend remains higher on both short and medium-term timeframes, and the kiwi's struggles look deep-rooted.
GBP/NZD could yet dip in the coming days, though we would treat any weakness as a buying opportunity.
From a technical perspective, GBP/NZD's 21-day moving average, shown in blue on the chart, has climbed to meet graphical horizontal support at 2.3544, the purple line, and together they form the pair's first line of defence:
GBP/NZD daily chart. Image © Pound Sterling Live, chart created with TradingView.
GBP/NZD trades at 2.3544 at the start of the new week, after dipping to 2.3491 on Friday.
The 2.3544 level marks a peak the pair hit on a number of occasions in 2025 and again in July, and the October breakout above it turned that old ceiling into a floor.
The 21-day sits just beneath at 2.3517 and has pointed higher since early September, so the average and the horizontal now combine into a support band at 2.3517 to 2.3544.
Overhead, the pair has topped out at 2.3668 three times this month, on 5, 13 and 15 October, the orange line on the chart.
What does a triple peak at the same level denote? It tells us sellers have defended that price on each test, so 2.3668 is the resistance that must give way for fresh highs to follow. A daily close above it would clear the supply that has capped the pair all month and open the way to new multi-year highs.
The 100-day moving average, in red, sits well below at 2.3176 and is rising, confirming the medium-term uptrend.
We look for GBP/NZD to hold the 2.3517 to 2.3544 band this week and make another run at 2.3668. A deeper dip would still count as a buying opportunity in our view, and only a daily close beneath the 100-day would change our medium-term Pound to New Zealand Dollar forecast.
Last week we warned of a pullback towards 2.3544 alongside the chance of fresh highs. The pullback came, with Friday's dip briefly through 2.3544, but the fresh highs did not: Tuesday and Thursday both stalled at 2.3668.
Westpac Cuts Its Kiwi Forecasts
The kiwi's underperformance has a cyclical root, and there is little standing in the way of it.
Westpac cut its year-end NZD/USD forecast to 0.56 from around 0.59 in its Australia and New Zealand Weekly of 19 October, citing elevated energy prices and higher long-term interest rates, and lowered its 2027 New Zealand growth forecast by 0.3 percentage points to 2.7%.
"We now expect NZD/USD to end this year around current levels at 0.56 – 3c lower than expected previously – before appreciating to around 0.64 over the course of 2027 as interest rate differentials with the US gradually close and as the USD appreciates," says Westpac.
The bank notes the kiwi's trade-weighted index sits at a 17-year low.
New Zealand imports nearly all of its fuel, so Brent crude near $110 a barrel drains household spending power and worsens the country's terms of trade, while a weaker kiwi adds to the cost of every barrel.
Retail card spending fell 0.4% in September, extending August's 0.9% decline, as higher fuel prices squeezed other purchases, according to official figures released on 16 October and analysed by Westpac.
Corpay argues the selloff has gone too far, with the kiwi tracking "~3-4 cents below our 'fair value' estimate," according to a note of 16 October, a reminder that a rebound in the kiwi is a risk to the call.
Daniella Arcadipane, Senior Currency Specialist at Indigo
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Talk to a specialistNew Zealand Inflation Is the Week's Big Test for the Kiwi
New Zealand's third-quarter inflation report on Thursday forms the main domestic event, with consensus at 0.8% quarter-on-quarter and 3.9% year-on-year, down from 4.1%.
A print above consensus would lift the odds of a Reserve Bank of New Zealand rate hike and support the kiwi, while a miss would weigh on it.
Market pricing shows an 80% chance of a hike to 3.00% at the RBNZ's 28 October meeting, according to Brown Brothers Harriman, so much of the hawkish case is already in the price.
ASB says the RBNZ will hike in October and December, while Westpac expects a pause in October, a split that leaves the kiwi exposed to disappointment.
For the pound, September's UK CPI figures land on Wednesday with consensus at 3.4%, and a firmer print would back sterling.
"In our view, the BOE may not need to tighten as much as markets anticipate, which is a drag on GBP," says Brown Brothers Harriman in its week-ahead note of 18 October.
With the kiwi's cyclical headwinds intact and the RBNZ hike largely priced, we see dips towards the 21-day as buying opportunities, consistent with our Pound to New Zealand Dollar forecast of fresh highs above 2.3668 in the weeks ahead.
Daniella Arcadipane, Senior Currency Specialist at Indigo
Moving a life-changing sum abroad? You won’t be doing it alone.
One specialist explains every step in plain English and stays with it until the money lands. FCA authorised, FRN 594433.
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