NZ dollar a tad weaker on ongoing Brexit uncertainty

Friday 25th October 2019

The New Zealand dollar was slightly weaker as risk sentiment turned sour as Brexit ructions continue.

The kiwi was trading at 63.82 US cents at 8:10 am in Wellington from 64.06 cents at 5pm. The trade-weighted index was at 70.62 points from 70.78.

“It a bit of risk off,” said Tim Kelleher, head of foreign exchange sales at Commonwealth Bank of Australia. “It failed to break through 64.20-64.50 US cents, which is quite a big pivotal area. I think if we hold 63.50 we may have another peak topside,” he said.

Meanwhile, UK Prime Minister Boris Johnson called for a general election on Dec. 12 to break Britain’s Brexit impasse.

According to the BBC, Johnson told opposition Labour leader Jeremy Corbyn he would give parliament more time to approve his Brexit deal but it must agree to a Dec. 12 general election. However, Corbyn said he would not support an election until a no-deal Brexit is "off the table".

The kiwi was trading at 49.63 British pence from 49.59 late yesterday and ANZ Bank FX/rates strategist Sandeep Parekh said the British pound would likely continue to struggle. “Whilst the risks around a ‘hard’ Brexit have eased for now, markets remain sensitive to developments in negotiations and politics,” he said.

On another front, according to MarketWatch, Vice President Mike Pence expressed hope for a near-term trade deal with China, but blasted Beijing for its intervention in Hong Kong and its treatment of Muslim-minority groups in a closely watched speech

The New Zealand dollar was unchanged at 93.52 Australian cents, at 57.43 euro cents from 57.50, at 69.31 yen from 69.55, and at 4.5111 Chinese yuan from 4.5247.

(BusinessDesk)

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