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NZD gains against pound on Brexit jitters, falls against USD

Friday 5th April 2019

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The kiwi lifted against the UK pound on concerns that the Brexit situation could drag out even further but fell against the greenback ahead of key US jobs data today.  

The kiwi was trading at 51.75 British pence at 7:50am in Wellington from 51.51 at 5pm. It eased to 67.58 US cents from 67.85 cents yesterday.

The prospect of a protracted Brexit weighed on the pound as the upper house of Britain’s parliament moves to debate legislation to force Prime Minister Theresa May to seek a delay to prevent a potentially disorderly departure from the European Union on April 12, Reuters said. 

May continues to try to forge a cross-party consensus to break the Brexit deadlock, but Labour leader Jeremy Corbyn has said she had not moved far enough in a first round of crisis talks. 

Meanwhile, markets are waiting for US jobs data later in the global trading day. Expectations are for that non-farm jobs increased by 180,000 following weak February data. Such an increase would put job numbers back near the three-month average, ANZ FX/rates strategist Sandeep Parekh said.  

"Whilst jobs momentum gives a good proxy of underlying growth in the economy, fixed-income markets will be keenly watching the average hourly earnings," he said. "Hourly earnings jumped to 3.4 percent year on year February, its highest level since April 2009, and if that were to rise further inflation would be a concern."  

Investors will also be watching for any further developments on the US-China trade front, with a meeting scheduled between President Donald Trump and China’s top trade negotiator, Vice President Liu He, this morning New Zealand time. 

The New Zealand dollar was trading at 94.94 Australian cents from 95.29 and at 60.22 euro cents from 60.35. It was at 75.43 Japanese yen from 75.56 and at 4.5405 Chinese yuan from 4.5555. 

The trade-weighted index was at 73.33 from 73.55.


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