NZ Herald business editor at large

Dollar soars on reduced Brexit risk

On the bounce: Bungy jumping in Rotorua. Photo / NZ Herald
On the bounce: Bungy jumping in Rotorua. Photo / NZ Herald

The New Zealand dollar and stock exchange have bounced this morning after weekend polls in the UK showed Brexit risk falling.

The kiwi dollar had surged to US71.12c - from US70.50c by 4.30pm. The NZX-50 was up 0.31 per cent to 6868 points.

Fears that Britain will opt to exit the EU rocked world markets last week, although global equities rebounded on Friday after both the "remain" and "leave" camps suspended campaigning following the fatal attack on Labour MP Jo Cox.

After taking a surprise lead in polls a week ago enthusiasm for the "leave" vote has slipped in latest polling.

Three opinion polls ahead of Thursday's vote showed the 'Remain' camp recovering some momentum, although the overall picture remained one of an evenly split electorate Reuters reports.

In a report this morning ASB economists said the "the outcome either way will create market volatility.

"The uncertainty generated by a Brexit result may tip the UK back into recession, " they wrote.

"A Brexit event may also tip the odds of further NZ rate cuts below 2 per cent. If weaker global growth does transpire, the prospect for looser global monetary conditions will ultimately put pressure on the RBNZ to also ease NZ monetary conditions."

- NZ Herald

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