NZ dollar gains vs British pound

Monday 23 May 2016 08:29 AM

NZ dollar gains vs British pound after BoE officials raise concerns about slowdown

By Tina Morrison

May 23 (BusinessDesk) - The New Zealand dollar rose against the British pound after Bank of England officials suggested that the UK's economic slowdown was due to more than just the risk the country could vote to leave the European Union.

The kiwi jumped to 46.60 British pence at 8am in Wellington, from 46.32 pence on Friday. The local currency was little changed at 67.56 US cents from 67.62 cents at the New York close and 67.60 cents on Friday.

The British pound had broadly improved last week on optimism voters would choose to stay in the European Union in an upcoming referendum on June 23, benefiting the economy. However, it has since retreated after Bank of England officials Gertjan Vlieghe and Kristin Forbes raised doubts about whether Britain's economic slowdown was due solely to the risk of the so-called Brexit vote.

"The British pound fell as BoE officials suggested that the economic slowdown could be broadening beyond Brexit," ANZ Bank New Zealand senior economist Philip Borkin and senior foreign exchange strategist Sam Tuck said in a note. "These comments weighed on the British pound, together with some uncertainty regarding the latest Brexit polls."

ANZ expects the kiwi to trade between 46.20 British pence and 47.10 pence today.

The New Zealand dollar edged up to 93.63 Australian cents from 93.50 cents on Friday. It was little changed at 60.30 euro cents from 60.33 cents, aat 74.46 yen from 74.39 yen, and at 4.4281 yuan from 4.4241 yuan. The trade-weighted index was at 72.89 from 72.82.

(BusinessDesk)

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