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NZ dollar lifts against British pound on Brexit jitters

The New Zealand dollar gained against the British pound on growing concerns about the likelihood of a no-deal Brexit.

The kiwi was trading at 51.55 British pence at 7:55 am in Wellington versus 51.35 British pence at 5pm. It was at 62.96 US cents from 63.14 US cents. The trade-weighted index was at 70.35 from 70.45.

Markets were jittery after the European Union accused Britain of playing a “stupid blame game” after a Downing Street source said a deal was essentially impossible because German Chancellor Angela Merkel had made unacceptable demands, Reuters reported.

European Council President Donald Tusk took to Twitter to tell UK Prime Minister Boris Johnson that “what’s at stake is not winning some stupid blame game. At stake is the future of Europe and the UK as well as the security and interests of our people. You don’t want a deal, you don’t want an extension, you don’t want to revoke, quo vadis?”

“Expectations that the UK will agree a deal with the EU at next week’s summit are fading fast, unsettling markets and hitting the GBP overnight,” said ANZ FX/rates strategist Sandeep Parekh.

The kiwi was also weighed by US-China trade tensions after announcements that the US is examining limits on investments by public retirement funds in Chinese stocks, and that a ‘blacklist’ of targeted Chinese companies has been created, Parekh said.

Meanwhile, the South China Morning Post reported Vice-Premier Liu He is again leading China’s delegation to Washington for the talks on Thursday and Friday, according to an official statement released by China’s Ministry of Commerce. However, he will not carry the title of “special envoy” for President Xi Jinping, an early indication he has received no particular instructions from China’s leader.

The Post also reported the Chinese delegation may cut short its stay in Washington by a day and leave on Oct. 11.

“Expect trade headlines to remain the primary driver,” said Parekh.

The New Zealand dollar was trading at 93.51 Australian cents from 93.55, at 67.47 yen from 67.76, at 4.4967 Chinese yuan from 4.4985 and at 57.48 euro cents from 57.50.

ends

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