Majority of UK want to stay in EU

Brexit fears subsiding, GBP rallies; Fed still has time on their side before hiking rates as latest inflation reading slips; some relief for farmers as dairy prices rise; AUD jolts higher on RBA minutes

Currencies

18th May 16, 8:27am by Kymberly Martin

By Kymberly Martin

Whilst the USD has traded a reasonably tight range over the past 24-hours the AUD and NZD have strengthened.

Overnight, US data delivery was generally on the higher side of expectation. However, crucially the core inflation measure for April slipped to 2.1% y/y (in line with expectation). This corroborates the view that the Fed still has time on its side with respect to inflation pressures. The USD trades at a similar level to yesterday morning.

The GBP was amongst the strongest performers over the past 24-hours, though giving up some of its gain overnight. Its rally may have been supported by the release of a poll showing that 55% of respondents favoured the UK remaining in the EU. 40% voted to leave. This was an increase in the ‘remain’ vote since a similar survey a month ago. The GBP/USD trades at 1.4460 this morning, though down from evening highs of 1.4520.

The EUR/USD nudged higher in the early hours of this morning. This may have been a knee-jerk reaction to headlines that Eurozone ministers are working towards a deal for Greece for 24 May that would satisfy Eurozone and IMF requirements. The EUR/USD has since given up its gain, trading back below 1.1320 at present.

The AUD was jolted higher on the release of the RBA’s Minutes yesterday. These expressed a bit of hesitance about cutting at the last meeting. The AUD/USD shot from 0.7290 to above 0.7360. However it now sits a little lower, at 0.7330.

The NZD/USD also benefitted from the AUD move. It was bolstered from 0.6780 to above 0.6840. Drifting lower overnight it attempted to retake the upper level in the early hours of this morning. It was assisted by the small gain (2.6%) recorded at the latest GDT auction. However, it failed to break through and now sits around 0.6810.

The NZD/AUD fell like a stone on the release of the RBA Minutes. It then experienced a bit of volatility around the release of the RBNZ’s inflation expectations survey. The cross now trades just below 0.9300, up from early evening lows below 0.9260.

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2 Comments

by PeterPen | 18th May 16, 10:30am 1463524224

Why not "Brexit hopes subsiding"? Why always this partial wording?

by CJ099 | 18th May 16, 1:47pm 1463536050

With the UK and EU still recovering from the Global Financial Crisis it would make far more sense for the UK to remain within the EU, especially since their PM Mr Cameron has been able to negotiate new terms in the favour of the UK and how they work with the EU.

Shame that Boris Johnson had to try to run against the PM (Cameron) in an obvious effort to gain political power since he's no long the Mayor of London. Campaigning to support a Britexit that would essentially lead the UK in to a very dark unknown abyss, of possible financial recession, and risk devolution of the UK, since the Scotts want to remain part of the EU.
It could even lead to the possible long term break up of the EU. - So, Shut Up Boris!

The repercussions of a Britexit could also be bad news for New Zealand, as the Pound would certainly plummet and drag the Euro with it. Having a negative impact on our export markets to the EU and UK for goods such as our; Beef, honey, shell fish etc....

This would also effect our Tourism and the immigration flow of quality migrants, since the Europeans would have less purchase power to move to or even visit a very expensive NZ, since they will have a devalued currency for quite some time.

Well this is one BitKiwi that will be voting for the UK to remain in the EU. United we stand!
And hopefully far away from the financial abyss of a Britexit.