By Will Peters

The pound sterling exchange rate complex is suffering a bout of weakness at the start of a new week and the outlook does not currently favour the UK currency.

The outlook for the pound sterling has turned decidedly bearish with losses being seen at the start of a new week.

"The pound continues to lose ground against most of its major currency pairs and a light calendar in the days ahead will make it even more difficult for the pound," notes Sasha Nugent at Caxton FX.

On Tuesday morning we see the pound sterling vs Australian dollar exchange rate is down 0.24 pct at 1.8408.

Against the New Zealand dollar (NZD) the UK currency is 0.22 pct lower at 1.9701.

Outlook for pound sterling against the Aus dollar

Be aware that there will be some interest in sterling today with the Bank of England MPC appearing before parliament and Industrial Production data due at 09:30. Follow these events here.

In Australia on Tuesday the NAB report showed deteriorating business confidence and conditions in Australia in February. AUD weakened and then staged a rebound. Trend momentum behind the Aus dollar remains marginally bullish at present and this should keep GBP-AUD pressured.

"It will be difficult for the pound to maintain strength. Nevertheless, a close at 1.85 is not out of the question," says Nugent.

Meanwhile, it is worth noting that things continue to pick up for the Australian economy.

It was shown that the number of net business creations per month is at its highest level since late 2007, suggesting that activity in the Australian economy is improving.

"Over the past six months, the pace of new business registrations per month has picked up, while the number of business failures has declined. Reflective of true business conditions, these data are a timely indicator of the underlying strength of the economy and business’ capacity to hire," says Savita Singh at ANZ Research.

Outlook against the New Zealand dollar

The pound sterling vs New Zealand dollar continues to struggle below the 2.000 area, don't expect a retest of this number anytime soon.

Concerning the outlook for the British pound against the NZ dollar, Nugent says:

"A pretty uneventful calendar leaves the market to focus on the main release for the week, the RBNZ rate announcement.

"If the central bank decides to raise interest rates, Governor Wheeler will be the first major central banker of a developed nation to shift away from record low borrowing costs. The kiwi has managed to drive the rate below 1.97. Further downside risk remains, suggesting there could be lower levels ahead."

Warning that the NZ dollar is due to swing lower

Alex Gurr, Currency Analyst with Blackwell Global today warns that a sharp decline in NZD is possible:

"Given the recent bullish nature and the complete standstill that the pair has found itself currently, it looks likely that the NZD is steeped for a major swing lower.

"Given the NZ economy (export dominated economy) and its dislike for a strong dollar, I believe that markets will look to take the push upwards of the OCR, and then we will see a spate of aggressive short selling from traders as they look to push it lower on the back of the NZD being far to strong. Supporting this is the ATR which shows that volatility has certainly slacked off as markets wait to see it gain direction.

"Obviously, it’s likely to range a little higher of a positive OCR statement but I would certainly watch the trend line in play and look to enter as it crashes through."