NZ dollar gives up gains vs. British pound in quiet trading
By Edwin Mitson
Oct. 3 (BusinessDesk) - The New Zealand dollar gave up gains against the British pound in quiet trading in currency markets, with limited activity due to a national holiday in China and public holidays on Australia's eastern seaboard and in South Australia.
The kiwi traded at 56.10 Britsh pence at 5pm in Wellington, down from the 56.29 pence at 8am and 55.99 pence on Friday. British Prime Minister Theresa May announced on Sunday that the two-year negotiations with the European Union to secure her country's exit from the trading bloc would begin by the end of March next year. She also emphasised that her focus would be on reducing immigration, rather than securing access to the single European market as large international corporates want. The trade-weighted-index was at 77.14 from 77.17 on Friday.
Stuart Ive, a senior dealer at OMF in Wellington said the pound had been trading in a "300 to 400 pip range since Brexit was confirmed" and the "pound had got a bit of support later in the day." He added that the response in markets in the Northern Hemisphere to May's announcement would be key.
The dollar was unchanged against the US dollar at 72.65 at 5pm from 8am and, down from 72.81 at the close of trading in New York on Friday.
Traders will be keeping an ear to the ground tomorrow, with the governor of the Reserve Bank, Graeme Wheeler, due to give an off-the-record speech to the Northland Chamber of Commerce in Whangarei at 2:30pm. Two hours later, new Reserve Bank of Australia governor Philip Lowe is due to announce his first policy review. The kiwi traded at 94.94 Australian cents, down slightly from Friday's 95.15 cents.
OMF's Ive said the latest GlobalDairyTrade auction is due to take place on Tuesday night, with expectations that it would be "flat at best, with potential for further weakness to the kiwi dollar."
The kiwi was little changed against the Chinese yuan at 4.8453 yuan from Friday's 4.8415 yuan. Against the Japanese yen, it rose slightly to 73.64 yen from 73.63 on Friday. The kiwi fell slightly against the euro to 64.65 cents from 64.75 at the start of the weekend.
The two-year swap rate rose one basis point to 1.97 percent and 10-year swaps rose four basis points to 2.44 percent.