NZ dollar weaker; greenback gains ground on Brexit jitters

Friday 29th March 2019

The New Zealand dollar fell as the US dollar strengthened due to ongoing jitters around the Brexit situation.

The kiwi was trading at 67.83 US cents at 8am in Wellington from 68.06 US cents at 5pm yesterday. The trade-weighted index was at 73.72 points from 73.85.

The US dollar gained ground as the UK pound fell ahead of the next Brexit vote, due Friday in the UK.

According to the BBC, MPs will be asked to vote again on Brexit on Friday but only on part of the deal negotiated with the EU. They will vote on the withdrawal agreement on the Irish "backstop", divorce bill and citizens' rights. It will not amount to a third "meaningful vote" on the deal, as it will not include a vote on the UK's future relationship with the EU, the BBC said.

The greenback also continued to benefit after news reports that China had made proposals in talks with the US on a range of issues that go further than it has before.

However, "right here, right now, the market is very much focused on the events in the UK and how they will pan out," said Stuart Ive. private client manager at OMF.

Domestically, investors will be focused on a speech by central bank governor Adrian Orr this morning after the RBNZ this week said its next rate move was likely be a cut. Key will be whether he reinforces that message or not.

"He could throw in some curve balls," but may simply reiterate Wednesday's statement, Ive said.

"But if he goes down the route of toning it down we would see the kiwi pop above 68 US cents fairly rapidly."

The New Zealand dollar was at 95.82 Australian cents from 95.94, at 51.96 British pence from 51.60, at 60.40 euro cents from 60.46, at 75.00 Japanese yen from 74.98 and at 4.5698 Chinese yuan from 4.5795.

(BusinessDesk)

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