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Kiwi climbs on pound

NZ Newswire logoNZ Newswire 20/06/2017 Paul McBeth
New Zealand coin is arranged for a photograph in Wellington, New Zealand © Mark Coote New Zealand coin is arranged for a photograph in Wellington, New Zealand

The New Zealand dollar has risen to a three-and-a-half month high against the British pound after Bank of England governor Mark Carney talked down the need for early interest rate hikes.

The kiwi climbed as high as 57.42 British pence, the highest since March 6, and was trading at 57.32p as at 8am on Wednesday in Wellington, from 56.97p on Tuesday.

It traded at US72.37 cents from US72.46c.

The British pound dropped 0.9 per cent against the greenback after Carney said it wasn't the time to raise interest rates, warning of anaemic wage growth and a likely hit to British incomes ahead of Brexit negotiations.

"In contrast to three of his fellow MPC members who voted for a rate increase last week, he signalled no urgency to raise interest rates anytime soon, owing to concerns about the impact Brexit will have on the economy," BNZ currency strategist Jason Wong said in a note.

"The NZD is up on all the major crosses, although apart from NZD/GBP, gains have been contained to within 0.1-0.5 per cent, with much of that occurring during NZ trading hours."

Dairy prices at the latest GlobalDairyTrade auction fell 0.8 per cent in the trade-weighted index's first decline since March, while prices for whole milk powder, New Zealand's key export, dropped 3.3 percent to $US3022 a tonne.

Wong said that was broadly in line with expectations after recent months showed stronger prices than anticipated.

On Wednesday morning, the kiwi slipped to 80.71 yen from 80.93 yen on Tuesday, holding near three-and-a-half month highs after the Bank of Japan stuck to its ultra-loose policy last week.

It edged up to 65.05 euro cents from 64.07c and increased to 95.58 Australian cents from 95.32c. It decreased to 4.9432 Chinese yuan from 4.9498 yuan. The trade-weighted index was at 78.15 from 78.06.

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