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

 


NZ dollar rises to 6-week high vs. euro after ECB cuts rates

NZ dollar rises to 6-week high vs. euro after ECB cuts rates, signals asset purchases

By Paul McBeth

Sept. 5 (BusinessDesk) - The New Zealand dollar rose to a six-week high against the euro after the European Central Bank unexpectedly cut its three key interest rates, and signalled an asset purchase plan to help kick-start the moribund regional economy.

The kiwi rose as high as 64.30 euro cents, trading at 64.19 cents at 8am in Wellington from 63.27 cents yesterday. The local currency edged down to 83.11 US cents from 83.20 cents yesterday.

The euro dropped after ECB cut the refinancing rate and deposit rate by 10 basis points to 0.05 percent and minus 0.2 percent respectively, surprising markets which were predicting no change. President Mario Draghi also announced plans to start buying at least 700 million euros of asset-backed securities to invigorate a lacklustre European economy and stir inflation in the euro-zone.

"Clearly it's a big move by the ECB and shows it stands read to act further if necessary," said Stuart Ive, senior dealer foreign exchange at OMF in Wellington. "The kiwi/euro has the potential to run higher from here."

OMF's Ive said the local currency has support at 63.15 euro cents and resistance at 64.60 cents, and can continue to climb against the euro, which has been in an upward channel since August last year.

Traders are watching US employment figures on Friday in Washington for more signs of strength in the world's biggest economy, which will cement expectations the Federal Reserve will start lifting interest rates earlier and faster than previously anticipated, and are also keeping an eye on ceasefire negotiations between Russia and Ukraine, which may ease geopolitical tensions which have been weighing on risk appetite.

OMF's Ive said New Zealand's upcoming general election on Sept. 20 is also weighing on investors, who will pay more attention as the voting day draws nearer.

The local currency rose to 87.39 yen at 8am in Wellington from 87.21 yen yesterday, and fell to 88.84 Australian cents from 89.01 cents. It rose to 50.84 British pence from 50.55 pence after the Bank of England kept monetary policy unchanged. The trade-weighted index gained to 78.95 from 78.67 yesterday.

(BusinessDesk)

© Scoop Media

 
 
 
 
 
Business Headlines | Sci-Tech Headlines

 

Scoop Business: Govt Resisting Pressure To Pump More Cash Into Solid Energy

Prime Minister John Key says it is “not the government’s preferred option” to make a fresh capital injection into the troubled state-owned coal miner, Solid Energy, but dodged journalists’ questions at his weekly press conference on whether that might prove necessary... More>>

ALSO:

Lagest Ever Privacy Breach Award: NZCU Baywide Accepts “Severe” Censure In Cake Case

NZCU Baywide says that once it was found to have committed a breach of a former staff member’s privacy, it had attempted to resolve the matter... the censure and remedies for its actions taken almost three years ago are “severe” but accepted, and will hopefully draw a line under the matter. More>>

ALSO:

Scoop Business: PayPal Stops Processing Mega Payments; NZX Listing Still On

PayPal has ceased processing payments for Mega, the file storage and encryption firm looking to join the New Zealand stock market via a reverse listing of TRS Investments, amid claims it is not a legitimate cloud storage service. More>>

ALSO:

Housing Policy: Auckland Densification As Popular As Ebola, English Says

Finance Minister Bill English said calls by the Reserve Bank Governor for more densification in Auckland’s housing were “about as popular in parts of Auckland as Ebola” would be. More>>

ALSO:

Crown Accounts: NZ Government Deficit Smaller Than Expected In First Half

The New Zealand government's operating deficit was smaller than expected in the first six months of the financial year, as the consumption and corporate tax take rose ahead of forecast in December, having lagged estimates in previous months. More>>

ALSO:

Get More From Scoop

 
 
Standards New Zealand

Standards New Zealand
 
 
 
 
 
 
 
 
Business
Search Scoop  
 
 
Powered by Vodafone
NZ independent news