NZ dollar climbs to 15-month high vs pound on Brexit vote delay
By Paul McBeth
Dec. 11 (BusinessDesk) - The New Zealand dollar climbed to a 15-month high against the British pound after a delayed Brexit vote reignited fears the UK won't agree to terms on leaving the European Union, adding to uncertainty in the global economy.
The kiwi rose to 54.74 British pence as at 8am in Wellington from 54.06 pence yesterday. It traded at 68.73 US cents from 68.90 cents yesterday.
The pound dropped 1.4 percent against the greenback after UK Prime Minister Theresa May put off a vote on Brexit that would have been rejected by a "significant margin". She will go back to Brussels in an effort to get more concessions on the Northern Ireland border plan, an area she said was the major obstacle to gaining parliamentary support. The kiwi has surged 12 percent against the pound since Oct. 10 on growing fears over a successful British exit from the EU.
The British turmoil added to growing unease about the geopolitical environment, where trade tensions between the US and China threaten to slow global growth. Stocks on Wall Street were weaker, with the S&P 500 index down 0.2 percent in late trading.
"With the clock ticking to the March 29th exit date, the market is concerned about the growing risk that the UK could slide into a no-deal Brexit," Bank of New Zealand interest rate strategist Nick Smyth said in a note. "The NZD has outperformed amidst the risk-off backdrop."
Local data today include November retail spending on credit and debit cards.
Across the Tasman, investors will be watching for a business confidence survey. The kiwi rose to 95.62 Australian cents from 95.46 cents yesterday.
The local currency increased to 60.50 euro cents from 60.26 cents yesterday and rose to 77.77 yen from 77.40 yen. It advanced to 4.7477 Chinese yuan from 4.7453 yuan. The trade-weighted index was at 75.26 from 75.13.