The NZ Dollar opens the day lower as markets were generally quiet due to the Thanksgiving Day holiday in the US. The stand out currency was the British Pound which moved higher after a political declaration on a future UK-EU relationship was published. Nothing of note on the local data front today, with the NZD expected to consolidate around current levels as we look to next week, where this a bit more activity expected with trade balance data and another business confidence number to be published.
The UK and the European Union have agreed on a final draft of the Brexit deal, as objectives for close economic ties have been agreed on in principle. The Pound has surged as markets view the final hurdle of negotiations coming to an end. Prime Minister May’s challenge now is to convince UK Parliament to back the deal in a vote that will take place next month.
Positive news around Brexit was countered by renewed concerns around Italy and their budget. Italian deputy prime minister Salvini has stated that he is prepared to confront EU leaders after the European Commission rejected Italy’s draft 2019 budget for the second time. This comes as Italy faces sanctions after the far-right League and anti-establishment Five Star Movement have violated fiscal rules.
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