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NZ dollar slips against pound on vote talk

NZ NewswireNZ Newswire 25/05/2016 Tina Morrison

The New Zealand dollar hit a three-month low against the British pound as confidence builds that the country will vote to remain in the European Union.

The kiwi touched 45.83 British pence, and was trading at 45.96 pence at 8am in Wellington, from 46.19 pence at 5pm on Wednesday. The local currency was little changed at 67.65 US cents from 67.51 cents.

The kiwi was off a touch at to 67.40 US cents after Fonterra issued its first forecast farmgate milk price for next season at $4.25 per kilogram of milksolids, at the low end of analysts' expectations.

The pound strengthened after a poll ahead of Britain's European Union membership referendum next month gave a six-point lead to the "in" camp, with 44 per cent of respondents in a poll saying they would vote to stay in the EU, compared with 38 per cent who wanted to leave.

Several bookmakers also widened the odds of the so-called 'Brexit' occurring.

That's bolstered investor confidence, with most economists and strategists saying a vote to leave the EU on June 23 would hurt the economy and weaken its currency.

"GBP rallied as markets further priced out 'Brexit'," ANZ said. "This sent the cross lower but 'Brexit' remains a risk."

In New Zealand the government's 2016 Budget is released.

The New Zealand dollar gained to 93.92 Australian cents from 93.72 cents, edged up to 60.64 euro cents from 60.54 cents, advanced to 74.51 yen from 74.25 yen and rose to 4.4336 yuan from 4.4272 yuan. The trade-weighted index increased to 72.92 from 72.83.

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