Daily Currency Update

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Kiwi unchanged despite Brexit concerns

NZD - New Zealand Dollar

The New Zealand Dollar has largely consolidated overnight, opening this morning at 0.7042 despite the volatility in global markets. With very little on the economic calendar to digest, the Kiwi continues to trade on risk sentiment which took a decidedly sour tone early in the European trading session as Brexit again took center stage. Negotiations between the EU and the UK are coming right down to the wire with the market forced now to consider the possibility of no-deal. Barnier reportedly has said he cannot guarantee a deal and it will be up to the UK to make the next move. Risk aversion briefly dominated the European trading session and led to the Kiwi falling to 0.7010. Nevertheless, the Kiwi reversed course after headlines in the UK suggest the UK government will drop controversial sections of their Internal Markets Bill if a trade deal was agreed. Buoyed by the news, markets are generally unchanged from yesterday although Brexit headlines will continue to influence market sentiment today in the absence of a heavy hitting economic calendar.

Key Movers

The Great British Pound enters our Key Movers section after a no-deal Brexit became a real possibility. The market has generally priced in that a deal will be reached, even if it was at the 11th hour. This optimism was seriously questioned overnight as EU Chief Negotiator Barnier told European Ambassadors that negotiations were stalled on the longstanding issues of fishing rights, ‘level playing field’ conditions and dispute resolution. Barnier has also reportedly said that he cannot guarantee a deal and it is up to the UK to come to the table. UK Prime Minister Johnston and European Commission President Von der Leyen will reportedly meet face to face for an 11th hour crunch meeting on Wednesday or Thursday to solve the impasse. The Sterling fell as much as 1.6% at one point but has since recovered to post a 0.6% fall. The Euro also fell initially by 0.4% but has since recovered to post a 0.1% gain.

Expected Ranges

NZD/AUD: 0.9431 - 0.9545 ▲

NZD/CAD: 0.8960 - 0.9069 ▲

NZD/EUR: 0.5781 - 0.5850 ▲

GBP/NZD: 1.8879 - 1.9106 ▼

NZD/USD: 0.7001 - 0.7086 ▲