NZD continues gain on GBP


The New Zealand dollar has surged against the pound as investors worry about the possible exit of Britain from the European Union.

The dollar has gained three percent in value against the pound, since the start of trading yesterday morning.

The Kiwi is sitting at 47.50 pence this morning.

The pound fell to a seven year low against the US dollar overnight, before recovering some ground after Prime Minister David Cameron spoke to the British parliament.

He has set a date of June 23 for a referendum on Britain's membership of the EU.

Currency analysts say the pound will remain under pressure until the referendum is out of the way.

A Financial Times poll of more than 100 economists at the start of the year found more than three-quarters thought a "Brexit" would adversely affect the UK's medium-term prospects.

That was nine times more than the eight percent who believed the British economy would benefit.

The sell-off in the pound has also seen other European currencies lose ground. The Euro fell just over one percent against the US dollar.

The New Zealand dollar has risen two percent against the Euro, to sit at 60.99 Euro cents.

Analysts say New Zealand is one of several "commodity currencies" that made gains overnight.

That was after a surge in the price of oil. West Texas crude rose 7.6 percent to US$31.90 and Brent crude gained 5.5 percent to US$34.85.

Copper and iron ore also made gains.

Currency analysts at BNZ say that despite New Zealand being a net importer of these three commodities the Kiwi strengthened.

The Kiwi has risen 1.3 percent against the US dollar, trading at 67.17 cents.

It gained 0.6 percent against the Trade Weighted Index (the average of the exchange rates of New Zealand's major trading partners).

The New Zealand dollar is sitting at 92.85 Australian cents. That is virtually unchanged from yesterday. Like the Kiwi, the Australian dollar has benefited from the rise in commodity prices, resulting in little change for the two Australasian currencies.