NZ dollar gains vs. British pound after BoE's Carney says Brexit could hit economy

Wednesday 9th March 2016

The New Zealand dollar gained against the British pound after Bank of England governor Mark Carney told lawmakers that a move to leave the European Union could hit the country's economy.

The kiwi advanced to 47.62 British pence at 8am in Wellington, from 47.49 pence at 5pm yesterday. The local currency was little changed at 67.63 US cents from 67.69 cents yesterday.

The pound slipped after BoE governor Carney warned the potential exit by Britain from the European Union would deliver a short-term hit to growth and the currency, foreign investment would probably diminish, and some big financial firms might move business out of Britain. Carney said he wasn't making any recommendation on how to vote, in an attempt to avoid becoming embroiled in a politically charged debate leading into the country's June 23 referendum on its EU status.

"BoE Governor Mark Carney saw a frosty exchange in the UK Parliament testifying on the issue of Brexit," Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management in New York, said in a note. "Carney has tried to remain as neutral as possible in the debate but his clear pro-EU leanings came under strong criticism from pro-Brexit forces in the Parliament and some of the questioning was downright hostile.

"The market remains at a standstill as the pro and anti Brexit forces remained even split for now."

In New Zealand today, electronic card spending data for February is scheduled for release at 10:45am. In Australia, Westpac Banking Corp releases its consumer confidence index for March.

The New Zealand dollar declined to 90.63 Australian cents from 91.10 cents yesterday, slipped to 76.17 yen from 76.45 yen, and slid to 4.3989 yuan from 4.4037 yuan. It was little changed at 61.48 euro cents from 61.42 cents. The trade-weighted index weakened to 72.66 from 72.76 yesterday.

BusinessDesk.co.nz

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