Brexit: New Zealand dollar gains on pound

(Newshub.)
(Newshub.)

The New Zealand dollar has made fresh gains against the British pound overnight, rising to 53 pence.

The kiwi was last at these levels in May 2013.

The New Zealand currency has fallen against the US dollar as investors exit Britain and seek "safe havens" like the US greenback, the Japanese yen and gold.

The kiwi has fallen below 70 US cents, trading at 69.95 US cents at 6:30am on Tuesday.

The pound has continued its slide on global currency markets as concern grows about the prospects for the British economy following the Brexit vote.

Ratings agency Standard & Poor's today cut Britain's credit rating overnight from triple-A to AA. S&P was the last of the ratings agencies to cut Britain's sovereign credit rating from AAA.

The pound fell 3.41 percent against the greenback overnight to trade at US$1.32.

That followed a fall of ten percent against the US dollar on Friday as it became clear that the 'Leave' campaign was going to win the referendum.

Chancellor George Osborne had contributed to a small rally in the pound late yesterday (NZ time), after he spoke to reporters, saying Britain was "open for business" and its economy was strong.

But that rally turned out to be short-lived.

The pound looks like coming under further pressure, with the currency reportedly now being targeted by hedge funds. Fund managers are betting the pound and British stocks will continue to fall.

As global investors pull out of the British share market it puts further pressure on the British currency.

The UK's FTSE 100 stock index closed 2.6 percent, while the FTSE 250 was down 7 percent.

The FTSE 250 contains many smaller British companies and is considered a barometer of the UK economy.

The FTSE 250 has lost 14 percent in two trading days, its worst performance since the 1987 crash.

Newshub.

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