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Kiwi creeps up ahead of Brexit vote

NZ NewswireNZ Newswire 21/06/2016 Paul McBeth

The New Zealand dollar has edged higher after Federal Reserve chair Janet Yellen told policymakers the looming Brexit referendum was among global risks being closely watched by the Fed.

The kiwi increased to US71.21 cents at 8am on Wednesday in Wellington from US71.12c on Tuesday and rose to 48.70 British pence from 48.51p.

Markets are in a holding pattern ahead of the June 23 vote where the British public will decide whether or not to stay part of the European Union.

Ms Yellen told the Senate's banking committee that the central bank was watching the situation carefully.

Still, she said she didn't "want to overblow the likely impact" of a successful 'leave' vote, which would likely stoke investor demand for safe-haven currencies.

"Yellen's testimony to the Senate offered few new clues on the path of normalisation. However, there was a subtle change in tone from being on watch for whether, rather than when, the US economy would show clear signs of improvement," ANZ Bank economist Philip Borkin said in a note.

On Wednesday morning, the kiwi rose to 95.45 Australian cents from A95.04c on Tuesday after the release of minutes to this month's Reserve Bank of Australia policy review showed some economic data had beaten the bank's expectations.

It gained to 63.26 euro cents from 62.72c after European Central Bank president Mario Draghi urged policymakers to push through economic reforms to support the eurozone's recovery, and that he was prepared to stabilise markets and provide liquidity if the UK voted to leave the EU.

The kiwi also rose to 74.63 yen from 74.09 yen and advanced to 4.6929 Chinese yuan from 4.6462 yuan. The trade-weighted index increased to 75.68 from 75.40.

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