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Spirited Australia, NZ dlrs settle down for Brexit show

Published 22/06/2016, 12:23 pm
© Reuters.  Spirited Australia, NZ dlrs settle down for Brexit show
NZD/USD
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SYDNEY/WELLINGTON, June 22 (Reuters) - The Australian and New Zealand dollars consolidated recent gains on Wednesday with investors retreating to the sidelines a day before Britain votes on whether to stay in or leave the European Union.

The vote still looks too close to call, traders said, and a win for the 'leave' side was likely to cause turmoil in global markets. Conversely, a 'remain' vote would remove a major cloud over the global economy and trigger a relief rally in risky assets.

The Australian dollar AUD=D4 was little changed on the day at $0.7453, having stepped back from $0.7513 - a high not seen in nearly two months.

"Current conditions are about risk sentiment for the commodity currencies, but smart money remains neutral awaiting the Brexit dust to settle," said Stephen Innes, senior trader at FX and CFD firm OANDA Australia and Asia Pacific.

The New Zealand dollar NZD=D4 was resting at $0.7132, having scaled a one-year peak of $0.7169 on Tuesday.

The kiwi is "looking indecisive after yesterday's multi-month high ... we don't expect it to stray too far from 0.7120 on the day," said Imre Speizer, Westpac senior FX strategist.

Both Antipodean currencies were also in a holding pattern against the yen and euro.

New Zealand government bonds 0#NZTSY= eased, sending yields two to three basis points higher.

Australian government bond futures slipped, with the three-year bond contract YTTc1 4 ticks lower at 98.380. The 10-year contract YTCc1 shed 5.5 ticks to 97.7750.

Both contracts continued to recoil from record highs set on Friday, when Brexit anxiety hit a peak.

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