New Zealand dollar gains against Sterling on Scottish referendum jitters

Monday 27th February 2017

The New Zealand dollar gained against the British pound after media reports that the Scottish government is seriously considering an independence vote but remained steady against the greenback ahead of US President Donald Trump’s address before Congress on Tuesday night in the US.

It was rose to 57.89 British pence as at 5pm versus 57.61 British pence as at 8am and 57.72 pence in New York at the end of last week. The pound lost ground in Asia after the Times of London reported Theresa May is preparing for the Scottish government to call a second independence referendum to coincide with the triggering of Article 50 next month.

The kiwi traded at 71.94 US cents as at 5pm versus 71.95 cents in late New York trading on Friday and at 93.55 Australian cents from 93.74 cents in New York on Friday.

"The only move of note has been in Sterling ... but it's really just washed around. There's been a little bit of profit-taking against the Aussie," said Tim Kelleher, head of institutional foreign exchange sales for ASB Bank.

Kelleher said the focus is on Trump’s address before Congress on Tuesday, in particular whether he offers any details about his infrastructure spending and tax plans.

Local data continues to ensure that the kiwi remains well supported. Annual net migration rose to 71,305 in the 12 months ended Jan. 31, eclipsing the record 70,600 set in calendar 2016, Statistics New Zealand said. Short-term visitor arrivals, which include tourists, people visiting family and friends and people travelling for work, reached 3.54 million in the year ended Jan. 31, up 11 percent from a year earlier.

The kiwi traded at 68.10 euro cents from 68.14 cents in New York at the end of last week The kiwi was at 80.71 yen from 80.61 yen and 4.9468 yuan from 4.9404 yuan. It was at 78.24 on a trade-weighed index basis versus 78.07.

New Zealand's two-year swaps rose 2 basis points to 2.3 percent while 10-year swaps rose 1 basis point to 3.46 percent.

BusinessDesk.co.nz

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