THE SCOOP: Pound v. New Zealand Dollar

GBPNZD has come under quite a bit of pressure since topping out in October. But overall, the market is in an uptrend. This suggests the latest round of setbacks is only corrective, ahead of a bullish continuation.

THE RISK - Brexit is a big risk here. Inability to get a deal done has been behind a lot of the weakness since October. But we believe a deal will get done, which should rally the market quite a bit.

Another factor here has been the recovery in US equities off recent lows, a benefit to the risk correlated Kiwi. But here too we think there will be a change and stocks will come back under pressure, which should also support the Pound.