The rising New Zealand dollar

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The New Zealand dollar has made gains over the long weekend. It is one and a half percent higher than it was on Friday.

The Kiwi is trading at 69 US cents, 94 Australian cents and is sitting at just under 48 pence.

The currency is being driven by offshore events.

One of those factors is this month's Brexit vote. The latest polls show that the "exit" faction has pulled narrowly ahead. That prompted a fall in the value of the pound against other currencies.

The pound has been a barometer for the Brexit vote. It made gains in April and May as it looked like the vote was leaning towards staying in the EU. Now it is going the other way.

Markets hate uncertainty and there is a lot of uncertainty over what will happen if Britain were to leave the EU. There are plenty of predictions, but that is all they are: predictions.

The other factor driving the New Zealand dollar is the latest US jobs report.

US non-farm payrolls rose by a seasonally adjusted 38,000 in May. That was well below expectations for growth of around 160,000 new jobs.

This morning Federal Reserve Chairwoman Janet Yellen gave a speech in which she said signalled that the Fed will hold off from raising rates later this month.

She said the Fed's current monetary policy setting was "generally appropriate."

That suggests the Fed will hold steady next week, but perhaps hike rates later this year.

Until recently the Fed had been hinting it might hike rates this month, for only the second time since the global financial crisis.

But the weak job numbers appear to have put a rate hike on hold.

There are other concerns too. Janet Yellen said she is also concerned about the Chinese economy and the "significant economic repercussions" of Britian leaving the European Union.

The strong Kiwi will provide another headache for the Reserve Bank as it prepares to review the Official Cash Rate on Thursday.

Economists are divided over whether the Reserve Bank will cut the OCR or hold steady at 2.25 percent.

Australia's Reserve Bank will review rates today. The vast majority of economists believe the RBA will keep rates on hold (at a record low of 1.75 percent), but cut again before the end of the year.

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