Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


NZ dollar may gain vs. euro as ECB policy review looms

NZ dollar may gain vs. euro as ECB monetary policy review looms

By Paul McBeth

Jan. 8 (BusinessDesk) - The New Zealand dollar may gain against the euro as investors returning from the Christmas and New Year holidays prepare for the European Central Bank to review monetary policy this week amid fears the region's economy will continue to shrink this year.

The kiwi increased to 63.66 euro cents at 5pm in Wellington from 63.54 cents yesterday. It was little changed at 83.53 US cents from 83.55 cents this morning, up from 82.94 cents yesterday.

Traders are preparing for the ECB to review its benchmark interest on Jan. 10, and the bank is expected to keep its main refinancing rate at a record-low 0.75 percent, according to a Bloomberg survey. That comes as economists are picking the euro region's economy to shrink 0.1 percent this year after a 0.4 percent contraction in 2012, according to a Bloomberg survey.

"No-one is expecting them to cut interest rates, but if you look at the situation in Europe, it continues to be pretty challenging over there," said Dan Bell, currency strategist at HiFX in Auckland. New Zealand's currency "has got more potential to get back over 64 euro cents - overall, the New Zealand dollar has started the year in favour."

The euro got a fillip in Asian trading after Japan's Finance Minister Taro Aso said the world's third-biggest economy would buy bonds issued by the European Stability Mechanism to help weaken the yen. The kiwi rose to 73.66 yen at 5pm in Wellington from 73.07 yen yesterday.

HiFX's Bell said the kiwi looks like it will continue to trade in a range against the greenback after an earlier rally on the US fiscal cliff deal, which averted US$600 billion of automatic tax increases and spending cuts.

The kiwi dollar rose to 79.69 Australian cents from 79.14 cents yesterday after Australia reported a wider trade deficit than expected. Australia's imports outpaced exports by A$2.64 billion in October, according to government figures, the widest gap since March 2008 and bigger than the median forecast in a Bloomberg survey.

New Zealand's currency increased to 51.86 British pence from 51.68 pence yesterday. The trade-weighted index advanced to 75.17 from 74.82.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Banks: Westpac Keeps Core Government Transactions Contract

The local arm of Westpac Banking Corp has kept its contract with the New Zealand government to provide core transactions, but will have to share peripheral services with its rivals. More>>


Science Investment Plan: Universities Welcome Statement

Universities New Zealand has welcomed the National Statement of Science Investment released by the Government today... this is a critical document as it sets out the Government’s ten-year strategic direction that will guide future investment in New Zealand’s science system. More>>


Scouring: Cavalier Merger Would Extract 'Monopoly Rents' - Godfrey Hirst

A merger of Cavalier Wool Holdings and New Zealand Wool Services International's two wool scouring operations would create a monopoly, says carpet maker Godfrey Hirst. The Commerce Commission on Friday released its second draft determination on the merger, maintaining its view that the public benefits would outweigh the loss of competition. More>>


Scoop Review Of Books: She Means Business

As Foreman says in her conclusion, this is a business book. It opens with a brief biographical section followed by a collection of interesting tips for entrepreneurs... More>>


Hourly Wage Gap Grows: Gender Pay Gap Still Fixed At Fourteen Percent

“The totally unchanged pay gap is a slap in the face for women, families and the economy,” says Coalition spokesperson, Angela McLeod. Even worse, Māori and Pacific women face an outrageous pay gap of 28% and 33% when compared with the pay packets of Pākehā men. More>>


Housing: English On Housing Affordability And The Economy

"Long lead times in the planning process tend to drive prices higher in the upswing of the housing cycle. And those lead times increase the risk that eight years later, when additional supply arrives, the demand shock that spurred the additional supply has reversed. The resulting excess supply could produce a price crash..." More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news