NZ dollar extends slide on weak jobs data, gains vs. euro on ECB view
Feb. 8 (BusinessDesk) – The New Zealand dollar extended its slide following yesterday’s weak employment data while gaining against a broadly weaker euro after the European Central Bank kept interest rates at a record low.
The kiwi dollar fell to 83.05 US cents from 83.53 cents at 5pm in Wellington yesterday and briefly fell as low as 82.94 cents. It rose to 62.03 euro cents from 61.85 cents.
The local currency began its slide yesterday after government figures showed the participation rate fell to 67.2 percent in the fourth quarter, the lowest level in almost nine years, while employment shrank 1 percent. Meantime, European Central Bank president Mario Draghi sent the euro lower, saying he is concerned about the euro’s strength keeping a lid on inflation, taken as a hint of further interest rate cuts.
“The employment figures took the heat out of the kiwi,” said Alex Hill, a strategist at HiFX. “The euro was the biggest loser last night after the ECB kept rates on hold. And Draghi talked about downside risks to inflation if the euro remained high. That’s why the kiwi-euro is up slightly.”
The New Zealand dollar may trade in a range of 82.70 US cents to 83.30 cents today, he said.
The kiwi fell to 80.79 Australian cents from 80.98 cents ahead of the release of the Reserve Bank of Australia’s monetary policy statement today, which may provide clues to any further interest rate cuts across the Tasman.
The trade-weighted index declined to 75.48 from 75.71. The kiwi traded at 77.63 yen from 77.98 yen and fell to 52.90 British pence from 53.36 pence.