Kiwi dollar gains after Brexit warning

  • 09/03/2016
Kiwi dollar gains after Brexit warning

By Tina Morrison

The New Zealand dollar gained against the British pound after Bank of England governor Mark Carney told lawmakers that a move to leave the European Union could hit the country's economy.

The kiwi advanced to 47.62 British pence at 8am in Wellington, from 47.49 pence at 5pm on Tuesday. The local currency was little changed at 67.63 US cents from 67.69 cents.

The pound slipped after Dr Carney warned the potential exit by Britain from the European Union would deliver a short-term hit to growth and the currency, foreign investment would probably diminish, and some big financial firms might move business out of Britain.

Dr Carney said he wasn't making any recommendation on how to vote, in an attempt to avoid becoming embroiled in a politically charged debate leading into the country's June referendum on its EU status.

"BoE Governor Mark Carney saw a frosty exchange in the UK Parliament testifying on the issue of Brexit," said BK Asset Management's Boris Schlossberg.

"Carney has tried to remain as neutral as possible in the debate but his clear pro-EU leanings came under strong criticism from pro-Brexit forces in the Parliament and some of the questioning was downright hostile.

"The market remains at a standstill as the pro- and anti-Brexit forces remained even split for now."

In New Zealand, electronic card spending data for February is scheduled for release while in Australia, Westpac releases its consumer confidence index for March.

The New Zealand dollar declined to 90.63 Australian cents from 91.10 cents, slipped to 76.17 yen from 76.45 yen, and slid to 4.3989 yuan from 4.4037 yuan. It was little changed at 61.48 euro cents from 61.42 cents. The trade-weighted index weakened to 72.66 from 72.76.