NZ dollar falls against British pound on Irish Brexit optimism
The New Zealand dollar tumbled against the British pound after Ireland's prime minister said a Brexit deal by Oct. 31 is
The kiwi was trading at 50.77 British pence at 8am in Wellington from 51.62 at 5pm yesterday after Irish Prime Minister
Leo Varadkar said a Brexit deal was possible after he met with British Prime Minister Boris Johnson.
“On the timeline question, I think it is possible for us to come to an agreement, to have a treaty agreed to allow the
UK to leave the EU in an orderly fashion and to have that done by the end of October. But there is many a slip between
cup and lip and lots of things that are not in my control,” he said according to the Financial Times.
“Sterling soared as PM Johnson and his Irish counterpart Varadkar announced that they could see a pathway to a possible
deal,” said ANZ FX/rates strategist Sandeep Parekh. The two leaders published a joint communique that said they held a
“detailed and constructive discussion” and they both agreed that "a deal is in everyone’s interest.”
The kiwi also held its gains against the greenback on some positive sentiment around the US-China trade talks as
high-level meetings kicked off in Washington.
The kiwi was trading at 63.14 US cents, unchanged from 5pm yesterday. The trade-weighted index was at 70.37 from 70.43.
Markets are closely focused on any headlines out of the trade talks. Optimism was buoyed after Bloomberg reported the
White House is looking at rolling out a previously agreed currency pact with China as part of an early deal that could
also see a tariff increase next week suspended, according to people familiar with the discussions.
Sentiment also got a lift when Trump announced the meeting with Chinese Vice Premier Liu He Friday - although he also
tweeted “Big day of negotiations with China. They want to make a deal, but do I?”
The talks, led by Liu and US Trade Representative Robert Lighthizer, are conducted behind closed doors with limited
transparency and only rare public briefings, according to the Wall Street Journal. The China side alone numbered about
The New Zealand dollar was also helped when the greenback dipped on tepid US inflation data. The Consumer Price Index
for All Urban Consumers was unchanged in September on a seasonally adjusted basis after rising 0.1 percent in August,
the US Bureau of Labor Statistics reported. Over the past 12 months, the all items index increased 1.7 percent before
“The data was slightly weaker than expected and supports calls for the Federal Reserve to cut rates further,” said ANZ
Bank FX/rates strategist Sandeep Parekh.
The New Zealand dollar was trading at 93.38 Australian cents from 93.55, 68.16 yen from 67.85, at 57.38 euro cents from
57.45 and at 4.4954 Chinese yuan from 4.4914.