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NZ dollar jumps as UK awaits vote result

NZ NewswireNZ Newswire 23/06/2016 Paul McBeth

The New Zealand dollar jumped above 72 US cents for the first time in more than a year as confidence that UK voters will stick with the European Union firmed as they go to the polls.

The kiwi climbed to 72.44 US cents at 8am in Wellington from 71.80 cents at 5pm on Thursday. The trade-weighted index climbed to a 13-month high 76.52 and was at 76.46 at 8am from 75.99.

Britons are in the final hours of a referendum on whether to stay in the EU, ending several weeks of heightened volatility in financial markets where polls showed the race to be closely run.

The Chicago Board Options Exchange's Volatility Index, known as Wall Street's 'fear gauge', dropped from a four-month high, indicating volatility in markets has eased.

Sterling rose to a six-month high against the greenback and equity markets on both sides of the Atlantic rallied on expectations UK voters will choose to stay in the EU.

"The polls for the UK referendum close within a couple of hours, but the market is already trading as if a 'Remain' outcome has already been determined," BNZ's Jason Wong said.

"For the NZD there is little technical resistance ahead, a reflection of its recent strength, but on fundamental factors the currency is looking really stretched."

With no local economic data, traders will be watching the outcome of the referendum which is expected to come during the local trading session.

The kiwi was little changed at 48.68 British pence from 48.55 pence, climbed to a year-high 63.68 euro cents from 63.41 cents, gained to a two-month high 76.73 yen from 75.12 yen and rose to a 14-month high 4.7615 Chinese yuan from 4.7222 yuan.

The kiwi fell to 95.15 Australian cents from 95.45 cents.

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