HOW TO TRADE FOREX: BRITISH POUND/NEW ZEALAND DOLLAR (GBPNZD)
The GBP/NZD pair encapsulates the relationship between two economies marked by distinct forces: the global influence of the United Kingdom and New Zealand's reliance on its agricultural and commodity exports. This cross offers traders a window into the complexities of international trade and monetary policies and an opportunity to capitalize on the contrasts between these two currencies. Trading GBP/NZD effectively requires detailed monitoring of political events in the UK, including Brexit and its aftermath, as well as trends in commodity markets that could impact the New Zealand dollar.
Furthermore, this pair is known for its volatility and wide trading ranges, which can offer significant opportunities for traders who understand how to navigate sharp shifts in market sentiment. The key to successfully trading GBP/NZD lies in a blend of rigorous technical analysis and a deep understanding of the economic fundamentals driving both currencies, preparing traders to act upon emerging opportunities swiftly.
Top 10 Factors Affecting the British Pound - New Zealand Dollar Pair
Monetary Policy of the Bank of England (BoE) and the Reserve Bank of New Zealand (RBNZ): Both central banks' interest rate decisions and monetary policies significantly influence the GBP/NZD pair. Divergences in policy direction can affect investment flows between the two currencies.
Interest Rate Differentials: The difference in interest rates between the UK and New Zealand can influence capital flow. Higher rates in one region may attract investments towards its currency, strengthening it against the other.
Economic Performance and Growth: Key economic indicators, such as GDP, inflation, and unemployment in the UK and New Zealand, affect perceptions of relative economic strength and can influence the GBP/NZD value.
Commodity Prices: New Zealand is a major exporter of agricultural and dairy products. Changes in the global prices of these commodities can affect the NZD's value and, consequently, influence GBP/NZD.
Trade Balance: Differences in the UK and New Zealand's trade balance can influence their currencies' relative value. A trade surplus can strengthen the national currency.
Global Risk Aversion: Changes in global risk appetite can affect currencies of smaller or more trade-dependent countries, like the NZD, compared to reserve currencies, such as the GBP.
Capital and Investment Flows: Direct and portfolio investment movements between the UK and New Zealand can affect the demand for both currencies.
Fiscal and Government Policies: Significant changes in fiscal policy and government decisions in the UK and New Zealand can impact investor confidence and the strength of the currencies.
Political Stability: Political uncertainty, including Brexit and its consequences for the UK and elections or political changes in New Zealand, can influence investor confidence and affect GBP/NZD.
Global Events and Financial Crises: Economic crises and other globally impactful events can alter risk appetite and move GBP/NZD as investors seek safety or yield.
Related Assets Influencing the GBP/NZD Pair Dynamics
Dairy Product Prices: As New Zealand is the world's largest exporter of dairy products, prices in this market can significantly influence the NZD. An increase in dairy product prices can strengthen the NZD against the GBP.
FTSE 100 Index: Its performance can affect the GBP as a barometer of the UK's economic health. An upward-trending index could strengthen the GBP.
NZX 50 Index: Reflects the economic health of New Zealand. An increase in the index may indicate a strong New Zealand economy, benefiting the NZD against the GBP.
Government Bonds Yields: Government bonds from the United Kingdom (Gilts) can influence currencies' risk and return perception. Increasing Gilt yields strengthen the GBP against the NZ Dollar.
Top FX Trading Apps
Opening a FX Trading Account
Select a Reliable Broker: Research and choose a broker that meets your expectations regarding trading tools. The security of your funds should be your priority.
Registration: Go to the broker's website and find the option to register a new account. You will need to provide basic personal information, such as name, email address, phone number, and, in some cases, an ID document to verify your identity.
Account Verification: Brokers require a verification process to comply with anti-money laundering regulations. This usually involves uploading documents such as a photo ID and proof of address.
Initial Deposit: You can make your first deposit once your account is verified. Brokers offer different payment methods, including bank transfers, credit/debit cards, electronic payment systems, and even cryptocurrencies. Returning to point 1, if you have specific needs like "I can only use brokers that accept payment method XYZ, " choose the broker that fits your needs.
Trading Platform: With your account funded, you can now access the broker's platform. If you haven't already, now is the time to familiarise yourself with the platform. Take advantage of the demo account if it's available. It allows you to practice your trading strategies, an advantage not only for beginners but also for experienced traders who are testing new strategies or simply seeing the execution and advanced features the trading app offers.
Set Up Your Trading Space: Customize the platform according to your preferences. This includes selecting the financial instruments you plan to trade, setting up charts, and implementing any technical indicators you regularly use.
Trading Strategy: If you haven't already, define your trading strategy, including risk management. Setting loss limits and profit targets can help you keep your trading disciplined and focused on your long-term goals.
First Trades: With everything in place, you can start trading.
BlackBull Markets, founded in 2014 by Michael Walker and Selwyn Loekman in Auckland, New Zealand, has emerged as a trusted and regulated ECN broker offering access to diverse tradable instruments. BlackBull Markets stands out with its three distinct types of ECN accounts, catering to traders' varying needs and preferences: Standard Account, Prime Account, and Institutional Account.
The Standard Account is an excellent choice for traders seeking a cost-effective forex experience. It offers a convenient entry point without minimum deposit requirements and commission-free trading. Traders can access all tradeable instruments and utilize user-friendly trading platforms, including PC, Mac, mobile, and Webtrader.
The Prime Account provides a competitive edge for those looking to maximize their trading potential. With spreads as low as 0.1 pips and a commission of $6 per lot for most currency pairs, traders can benefit from tighter spreads and lower costs. The Prime Account requires a minimum initial deposit of 2000 USD and offers leverage of up to 1:500, along with micro lots for precise position sizing.
BlackBull Markets also caters to larger traders with its Institutional Account, providing a truly institutional trading experience. With a minimum initial deposit of 20,000 USD, traders can access customisable commission structures, 24/7 dedicated technical support, and a customised MAM/PAMM platform. Qualifying traders can benefit from free VPS access based on trading volume.
Regulation is key to BlackBull Markets' offering, ensuring a secure and transparent trading environment. Prominent authorities regulate the broker, including the Financial Services Commission of New Zealand (FSPR).
With a commitment to exceptional financial services and a focus on client satisfaction, BlackBull Markets has garnered a strong reputation within the industry. Their comprehensive range of over 26,000 tradable instruments, competitive trading conditions, and reliable customer support positions them as a top choice for traders seeking a trusted ECN broker.
Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange, you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and, therefore, you should not invest money you cannot afford to lose. You should make yourself aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any questions or concerns as to how a loss would affect your lifestyle.
