Pound Breaks Past NZD as Kiwi Catches Crossfire

The pound-to-New Zealand dollar exchange rate is edging higher at 2.3474 on Wednesday, pushing against its July high as the New Zealand dollar gets caught up in Australia's repricing.

A fading bet on an Australian Reserve Bank hike has dragged the Kiwi lower, lifting the pound, and soft Australian core inflation has pared bets on another RBA hike.

The move follows a surge in the pound-to-Australian dollar rate through its 100-day average, after trimmed mean CPI rose only 0.2% in August, below the 0.3% consensus.

New Zealand two-year yields fell 8 basis points to 3.85%, and ten-year yields fell 7 basis points to 5.04%, a bigger rally than in Australia itself, according to Commonwealth Bank of Australia's rates team.