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NZ dollar up against pound on Brexit fears

NZ NewswireNZ Newswire 12/06/2016 Tina Morrison

The New Zealand dollar touched its highest level against the British pound in 13 months amid concerns voters are leaning towards an exit from the European Union.

The dollar is approaching the 50 British pence level as the threat of the Brexit looming in the upcoming referendum.

The kiwi hit 49.65 British pence, its highest level since May last year, and was trading at 49.52 pence at 8am in Wellington on Monday, from 49.03 pence at 5pm on Friday. The local currency slipped to 70.50 US cents from 70.56 cents at the New York close and 70.85 on Friday.

The British pound sank after the publication of an ORB poll for the UK's Independent newspaper ahead of the June 23 referendum showed the 'leave' camp opened up a 10-point lead over 'remain'.

It had 55 per cent planning to vote to leave and 45 per cent intending to vote to stay, showing the margin had widened from a 51/49 split in the equivalent poll back in April.

Most economists expect Brexit would hurt the UK economy.

"As the GBP remains under pressure, the NZD/GBP has the 0.5000 level firmly in its sights - the cross last traded above this level in April last year," BNZ's Kymberly Martin said. "The fate of this cross remains in the hands of the UK referendum which is now only 10 days away."

Later on Monday the focus will turn to a slew of Chinese data releases for May, including industrial production, retail sales and fixed asset investment.

The New Zealand dollar fell to 75.32 yen from 75.84 yen as investors favoured safe haven assets after oil prices fell and amid concerns about the risk of 'Brexit'.

The kiwi dropped to 4.6241 yuan from 4.6471 yuan, edged lower to 62.64 euro cents from 62.72 cents, and was little changed at 95.53 Australian cents from 95.56 cents. The trade-weighted index slipped to 75.37 from 75.52.

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