NZ dollar extends decline against British pound as pundits pick 'Bremain' vote

The kiwi fell to 48.36 British pence at 8am in Wellington.

The New Zealand dollar extended its decline against the British pound as a pickup in poll support for Britain to stay in the European Union prompted bookies to increase the odds of a successful "remain"' vote.

The kiwi fell to 48.36 British pence at 8am in Wellington from 48.77 pence yesterday. The local currency was little changed at 71.04USc cents from 71.17USc cents yesterday.

UK bookmaker Oddschecker has raised the odds of "remain" winning the June 23 referendum to 80% from a low of 61%  last week after recent polling since the killing of British MP Jo Cox halted momentum for those in favour of leaving the European bloc. The shortening odds of a remain vote, dubbed 'Bremain', pushed  sterling near to a month-high and saw equity markets gain on both sides of the Atlantic.

"A classic risk-on rally has ensued from the weekend polling showing a decisive shift in support for the UK remaining in the EU," Bank of New Zealand currency strategist Jason Wong said in a note. "Commodity currencies have outperformed in this risk-on environment. The NZ dollar blasted through the 0.71 mark yesterday afternoon and has tracked largely sideways since then."

The local currency slipped to 95.32Ac from 95.52Ac yesterday ahead of minutes to the Reserve Bank of Australia's last policy meeting. The RBA kept its cash rate at 1.75% this month, with governor Glenn Stevens saying the policy was about right to ensure sustainable growth after a reduction in May.

The kiwi slipped to 4.6722 Chinese yuan from 4.6794 yuan yesterday and dropped to ¥73.39 from ¥74.46. It increased to 62.81 euro cents from 6.51 cents yesterday. The trade-weighted index was little changed at 75.44 yesterday.

(BusinessDesk)