NZ dollar rangebound as Brexit worries weigh, eyes on US Fed

Tuesday 19th March 2019

The New Zealand dollar was slightly weaker against the greenback but stuck in a tight range amid more Brexit turmoil and as markets await direction from the US Federal Reserve later this week.

The kiwi was trading at 68.49 US cents at 8am in Wellington from 68.61 US cents at 5pm. It was at 51.67 British pence from 51.62.

Markets were jittery after UK Prime Minister Theresa May was told by the Speaker of the House of Commons that any withdrawal agreement put before MPs must be substantially different from the existing deal.

"It now looks like the UK will not be voting on an exit deal, ahead of the EU meeting on Thursday," said ANZ Bank FX/rates strategist Sandeep Parekh. "May is expected to head to Brussels to ask EU leaders for a longer extension to the deadline, although exactly how long will be requested is still unclear. This uncertainty won’t be welcomed by the markets."

Looking ahead, the key event is the US Federal Reserve’s latest monetary policy statement due Thursday morning New Zealand time. The market will be watching to see whether Fed chair Jerome Powell reiterates that the Fed will be “patient” about raising interest rates further.

Later the same morning local GDP data is expected to show the New Zealand economy expanded 0.6 percent in the fourth quarter, according to a Bloomberg survey of economists.

Today, investors will also be watching for the minutes from the latest Reserve Bank of Australia monetary policy meeting as well as consumer confidence both here and in Australia.

The kiwi traded at 96.48 Australian cents from 96.46. It was at 60.39 euro cents from 60.53, at 76.28 yen from 76.55 and at 4.5964 Chinese yuan from 4.6060

The trade-weighted index was at 74.18 from 74.32.

(BusinessDesk)

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