NZ dollar heads for 0.2% weekly dip on Brexit nerves 17 Jun 2016
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Friday 17 June 2016 05:15 PM
NZ dollar heads for 0.2% weekly dip as Brexit vote keeps markets nervous
By Paul McBeth
June 17 (BusinessDesk) - The New Zealand dollar is heading for a 0.2 percent decline against the greenback this week as investors shy away from taking strong positions ahead of June 23 referendum in the UK on whether to quit its membership of the European Union.
The kiwi traded at 70.41 US cents at 5pm in Wellington from 70.55 cents on Friday in New York last week. It was little changed from 70.46 cents at 8am, down from 70.76 cents yesterday. The trade-weighted index fell to 75.16 from 75.59 yesterday, and is heading for a 0.6 percent decline this week.
A BusinessDesk survey of seven currency analysts on Monday predicted the kiwi would trade between 68.80 US cents and 72 cents this week. Three picked a decline, three expected little change in the currency, and one projected it to gain.
Polls this week had shown growing support for UK to leave the EU, though the murder of Labour MP Jo Cox which is speculated to have been linked to the referendum, has tempered support for an exit. The British pound recovered some of its recent losses on the prospect of a successful 'leave' vote, known as 'Brexit', and the kiwi fell to 49.46 pence from 49.90 pence yesterday.
"The murder in London last night has changed the skew on Brexit a little bit," said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional in Auckland. "It's really hard to see the kiwi break out of the 69.50 to 71.50 (US cents) range ahead of Brexit."
ASB's Kelleher said the kiwi was still benefitting from "reasonably good fundamentals" after yesterday's better-than-expected economic growth and today's upbeat manufacturing and consumer confidence surveys.
The local currency fell to 73.39 yen from 73.75 yen yesterday, having touched a three-year low against Japan's currency after the Bank of Japan yesterday held off adding more stimulus. Japan's Finance Minister Taro Aso today said he was concerned with the currency's strength, and officials from his office, the BOJ and Financial Services Agency met to discuss the action in the markets.
The kiwi declined to 95.45 Australian cents from 95.71 cents yesterday, and decreased to 4.6388 Chinese yuan from 4.6520 yuan. It was little changed at 62.62 euro cents from 62.74 cents.
New Zealand's two-year swap rate increased two basis points to 2.26 percent, and 10-year swaps gained three basis points to 2.74 percent.
(BusinessDesk)
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