Sharechat Logo

NZ dollar gains as Fed rate hike timing weighed, poll shows Brexit has chance

Friday 27th May 2016

Text too small?

The New Zealand dollar gained from a two-month low as a poll showed there's still a chance Britain will vote to exit the European Union next month, creating market uncertainty that may discourage the Federal Reserve from hiking interest rates in June.

The kiwi rose to 67.44 US cents as at 5pm in Wellington, from 67.16 cents at late yesterday. The local currency rose to 45.97 British pence from  45.64 pence late yesterday.

An ICM poll published this week showed 45 percent of Britons favoured leaving the EU, dubbed the Brexit, while 44 percent wanted to stay in the EU bloc. The EU membership referendum is to be held on June 23, or about a week after the next Federal Open Market Committee. Traders are pondering whether uncertainty over the Brexit will delay the Fed after Federal Reserve Governor Jerome Powell said in a speech in Washington yesterday that a rate hike could be appropriate fairly soon but the Fed had to weigh risks including the Brexit and China's debt levels.

"If they want to run carefully it would be July" for an interest rate hike, said Mark Johnson, senior dealer at OMF. Fed chair Janet Yellen is scheduled to give a speech on Friday in the US but isn't expected to make any fresh pronouncements on the timing of policy moves, he said.

The kiwi recovered from yesterday's selloff caused by Fonterra Cooperative Group setting the opening milk payout forecast for the coming season below market estimates, stoking concerns about a third season of low prices for New Zealand's largest export commodity.

The kiwi is heading for a 0.2 percent weekly decline from about 67.62 US cents at the end of last week. Johnson said the currency would need to close below 67 cents to push much lower and seemed to be consolidating at around current levels.

The New Zealand dollar rose to 93.33 Australian cents from 93.12 cents yesterday and gained to 60.30 euro cents from 60.04 cents. It rose to 74.08 yen from 73.70 yen and increased to 4.4255 yuan from 4.4033 yuan.

The two-year swap rate was unchanged at 2.24 percent and the 10-year swaps fell 1 basis point to 2.86 percent.

BusinessDesk.co.nz



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report