NZ dollar pushes top of greenback, euro ranges as ECB looms
NZ dollar pushes top of greenback, euro ranges as ECB meeting looms
By Paul McBeth
Jan. 9 (BusinessDesk) - The New Zealand dollar rose to the top of recent trading ranges against the greenback and euro as investors gear up for the European Central Bank to review its monetary policy amid signs the 17-nation bloc's economy is deteriorating.
The kiwi rose to 83.80 US cents at 5pm in Wellington from 83.50 cents at 8am and 83.55 cents yesterday. It advanced to 64.09 euro cents from 63.63 cents yesterday.
European central bankers are expected to keep the benchmark interest rate at a record-low 0.75 percent when they review monetary policy settings at their Jan. 10 meeting, as weaker economic figures spark fears about the region's ability to recover from its sovereign debt crisis. Euro-zone unemployment rose to a record 11.8 percent in November, according Eurostat data, while separate data showed Germany's exports dropped more than expected in the same month.
"The kiwi/euro might continue to rally up if people talk about cutting rates" at the ECB meeting, said Tim Kelleher, head of institutional FX sales NZ at ASB Institutional in Auckland. The currency "looks a little overstretched at 64/64.50 euro cents."
The New Zealand currency has decoupled slightly from US equities, with stocks on Wall Street falling in the lead-up to fourth-quarter earnings season, and Kelleher said it will probably get sold at 84/84.50 US cents. Aluminium producer Alcoa kicked off the season after the close of trading, and signalled it expects demand for the metal to grow 7 percent this year.
New Zealand building consents fell 5.4 percent in November to 1,423 due to a small issuance of apartment consents, which are typically volatile. Excluding apartments, building consents climbed 4.6 percent in the month.
The kiwi dollar increased to 79.84 Australian cents from 79.71 cents yesterday after government figures showed consumer spending across the Tasman unexpectedly shrank 0.1 percent in November.
New Zealand's currency gained to 73.27 yen from 73.10 yen yesterday after Reuters reported the Bank of Japan will consider monetary easing this month and may double its inflation target to 2 percent.
The kiwi rose to 52.22 British pence from 51.86 pence yesterday and the trade-weighted index advanced to 75.45 from 75.16.