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NZ dollar weaker against UK pound as fears of no-deal Brexit fade

Tuesday 10th September 2019

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The New Zealand dollar eased against pound as expectations of a no-deal Brexit faded although the political outlook there remains volatile.

The kiwi was trading at 52.03 British pence at 8am in Wellington from 52.34 at 5pm yesterday. It touched a low of 51.58 overnight. It was at 64.25 US cents from 64.23 cents.

UK industrial output data was better than expected in July, with industrial production lifting 0.1 percent from June and output up 0.3 percent. The monthly estimate of July UK GDP rose 0.3 percent on the month beating forecasts for a 0.1 percent increase, according to Bloomberg. The better-than-expected data helped allay fears of a possible UK recession. 

That, coupled with news the legislation preventing a no-deal Brexit on Oct. 31 passed into law, gave the pound a boost. However, it trimmed some of its gains when John Bercow, speaker of Britain’s House of Commons, announced that he would be standing down.

Prime Minister Boris Johnson is calling for a snap election but that is expected to be rejected by Tory lawmakers just ahead of a five-week suspension of Parliament. According to the BBC, Opposition MPs confirmed they would not back the push for an Oct. 15 poll, insisting a law blocking a no-deal Brexit must be implemented first.

Markets will now be watching for China’s inflation and producer price index data today for a further steer on how its economy is faring. 

The trade-weighted index was at 71.40 from 71.42.

The kiwi was trading at 93.59 Australian cents from 93.70 and at 58.14 euro cents from 58.26. It was at 68.87 yen from 68.68 and at 4.5760 Chinese yuan from 4.5769.

(BusinessDesk)

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