NZ dollar near 2 1/2-yr low vs pound on hope for early Brexit deal
By Paul McBeth
Sept. 11 (BusinessDesk) - The New Zealand dollar held near a two-and-a-half-year low on optimism the UK and European
Union will reach an amicable split as early as November.
The kiwi traded at 50.06 British pence at 5pm in Wellington, having fallen as low as 50 pence, from 50.47 pence
yesterday. The local currency was little changed at 65.26 US cents from 65.17 cents yesterday.
The pound rallied on news overnight that EU chief negotiator Michel Barnier said a Brexit deal could be wrapped up as
early as November. The UK and EU have been making positive steps to overcoming their differences in recent weeks
following several high profile resignations in the British ministry earlier this year over Prime Minister Theresa May's
preferred Chequers deal.
"The kiwi/Sterling fell to its lowest since June 2016 because we had Barnier saying 'we can do a deal within eight
weeks'," said Imre Speizer, Westpac Banking Corp's head of NZ strategy. "It's not quite to where we were before the
Brexit vote, but it's getting towards it."
Local data today showed New Zealand spending on electronic cards rose 1 percent last month due to a big increase in
spending on fuel. Speizer said he was surprised that didn't lift the kiwi, but added that many investors are waiting for
next week's second-quarter gross domestic product report.
"If we get a strong GDP number that will send the shorts screaming for the exit door," he said, referring to investors
who might be betting on the kiwi depreciating further.
The kiwi traded at 91.62 Australian cents from 91.64 cents yesterday after the NAB business confidence survey showed the
sentiment of firms across the Tasman at a two-year low. The kiwi rose to 4.4795 Chinese yuan from 4.4702 yuan yesterday
and gained to 72.71 yen from 72.31 yen. It fell to 56.25 euro cents from 56.44 cents. The trade-weighted index was at
71.13 from 71.10.
New Zealand's two-year swap rate was unchanged at 1.96 percent while 10-year swaps decreased 1 basis point to 2.8