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

 


NZ dollar rises to 7-week high vs. euro on ECB view

NZ dollar rises to 7-week high vs. euro as ECB seen easing monetary policy in June

By Tina Morrison

May 14 (BusinessDesk) – The New Zealand dollar rose to its highest in almost seven weeks against the euro on speculation the European Central Bank will ease monetary policy at its meeting next month.

The kiwi touched 63.17 euro cents early this morning, its highest level since March 28, and was trading at 62.98 cents at 8am in Wellington, from 62.72 cents at the 5pm market close yesterday. The local currency was unchanged at 86.30 US cents.

The euro was the worst performing major currency overnight after the ZEW German investor confidence gauge declined for a fifth consecutive month in May to its lowest level since January last year. Adding to declines in the euro, Dow Jones reported that the hawkish German central bank is now willing to back an array of stimulus measures by the European Central Bank next month if needed to fight low inflation.

“For years the Bundesbank has been the most trenchant opponent to extraordinary monetary policy measures,” Raiko Shareef, currency strategist at Bank of New Zealand, said in a note. “This reported shift in its mindset lends ECB president (Mario) Draghi considerable support if he decides to cut interest rates in June, or even engage in quantitative easing.”

Draghi kept the ECB’s interest rate at a record low last month but signalled the bank was ready to act at its next meeting, pending the latest inflation predictions. When inflation is too low, debt becomes harder to services and consumers may put off purchases in the hope that prices will fall.

The Bundesbank is willing to support a negative interest rate on bank deposits, long-term loans to banks at capped interest rates and ECB purchases of packaged bank loans if needed to boost inflation, Dow Jones reported on its Wall Street Journal site, citing a person familiar with the matter that it didn’t name.

In New Zealand today, traders are awaiting the Reserve Bank’s latest six-monthly Financial Stability Report, scheduled for release at 9am, which will be followed by a press conference. Governor Graeme Wheeler will also appear before the government finance select committee at midday to discuss the report.

First quarter retail sales data is released at 10:45am while the level of non-resident bond holdings will be published at 3pm.

The New Zealand dollar was little changed at 92.23 Australian cents from 92.22 cents yesterday following the Australian federal budget and weaker than expected Chinese data on industrial production, retail sales, home sales and investment.

The kiwi advanced to 51.29 British pence from 51.12 pence yesterday ahead of the Bank of England’s quarterly inflation report tonight where the central bank updates its forecasts.

The local currency edged up to 88.27 yen from 88.24 yen yesterday while the trade-weighted index gained to 80.32 from 80.21.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Must Sell 20 Petrol Stations: Z Cleared To Buy Caltex Assets

Z Energy is allowed to buy the Caltex and Challenge! petrol station chains but must sell 19 of its retail sites and one truck-stop, the Commerce Commission has ruled in a split decision that acknowledges possible retail price coordination between fuel retailers occurs in some regions. More>>

ALSO:

Huntly: Genesis Extends Life Of Coal-Fuelled Power Station To 2022

Genesis Energy will keep its two coal and gas-fired units at Huntly Power Station operating until 2022, having previously said they'd be closed by 2018, after wringing a high price from other electricity generators who wanted to keep them as back-up. More>>

ALSO:

Dammed If You Do: Ruataniwha Irrigation Scheme Hits Farmer Uptake Targets

Enough Hawke's Bay farmers have signed up for water from the proposed Ruataniwha Water Storage Scheme for it to go ahead as long as a cornerstone institutional capital investor can be found to back it, its regional council promoter announced. More>>

ALSO:

Reserve Bank: OCR Stays At 2.25%

Reserve Bank governor Graeme Wheeler kept the official cash rate at 2.25 percent, in a decision traders had said could go either way, while predicting inflation will pick up as the slump in oil prices washes out of the data and capacity pressures start to build in the economy. More>>

ALSO:

Export Values Down: NZ Posts Biggest Annual Trade Deficit In 7 Years

New Zealand has recorded its biggest annual trade deficit since April 2009, reflecting weaker prices of agricultural commodities such as dairy products, beef and lamb, and increased imports of vehicles and machinery. More>>

ALSO:

Currency Events: NZ's New $5 Note Wins International Banknote Award

New Zealand’s new Brighter Money $5 note has been named Banknote of the Year in a prestigious international competition. The $5 note was awarded the IBNS Banknote of the Year title at the International Bank Note Society’s annual meeting. More>>

ALSO:

Get More From Scoop

 
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news