NZ dollar rises to 2-week high vs pound as Boris Johnson adds to UK resignations

Tuesday 10th July 2018

The New Zealand dollar rose against the British pound to the highest level in almost two weeks after UK Foreign Secretary Boris Johnson became the latest minister to resign from Theresa May's Conservative government over her Brexit plans.

The kiwi dollar rose to 51.59 British pence, and earlier touched 51.82 pence from 51.42 pence late yesterday. The kiwi traded at 68.33 US cents from 68.39 cents yesterday.

In a letter to May, published in the Guardian, Johnson said her plan would see Britain become a "colony" of Europe and that the prospects of an open, outward-looking global economy were fading. "That dream is dying, suffocated by needless self-doubt." His departure follows the resignation of former Brexit minister David Davis and junior Brexit minister Steve Baker and undermines May's grip on power just nine months out from the official date for Britain to leave the EU.

"May’s efforts to maintain close ties with the EU following the March 2019 Brexit deadline are perceived by some as a failure to those who voted for divorce," said Miles Workman, an economist at ANZ Bank New Zealand, in a note. "The pound has suffered as a result, pushing this cross higher, and highlights the challenge of picking currency direction at a time of something as uncertain as Brexit."

In New Zealand today, traders will be watching for June electronic card spending and across the Tasman, the National Australia Bank business conditions survey for June is due out and in China, the PPI and CPI for June are scheduled.

The kiwi traded at 91.57 Australian cents from 91.65 cents yesterday and declined to 4.5188 yuan from 4.5268 yuan. It rose to 75.74 yen from 75.52 yen and traded at 58.18 euro cents from 58.14 cents. The trade-weighted index traded at 72.76 from 72.78.

(BusinessDesk)

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