NZ dollar falls vs euro, nearing two-year low, on signs of reviving European growth
By Jonathan Underhill
Nov. 15 (BusinessDesk) - The New Zealand dollar fell versus the euro, closing in on the two-year low it reached last month, after stronger-than-expected growth in Germany, the regional bloc's biggest economy, drove up its currency.
The kiwi dollar dropped to 58.35 euro cents as at 8am in Wellington from 58.83 cents late yesterday. It rose to 68.81 US cents from 68.68 cents yesterday.
The euro gained against the greenback overnight after figures showed the German economy grew a seasonally adjusted 0.8 percent in the third quarter, beating estimates of a 0.6 percent gain. Meanwhile, the ZEW research institute's economic sentiment index rose to 18.7 this month from 17.6 in October. Germany is helping drive the region's growth, with a preliminary estimate of euro zone gross domestic product from Eurostat showing 0.6 percent quarterly growth and an annual increase of 2.5 percent.
"For the first time in a while, economic growth across Europe’s major economies is showing some more backbone," said Con Williams, rural economist at ANZ Bank New Zealand, in a note.
Williams said in New Zealand today, real estate data will be closely watched for signs of further cooling in the housing market in the wake of the change of government.
"Housing anecdotes have remained subdued post-election, so we wouldn’t be surprised to see turnover volumes remain low and house price inflation continue to be modest, with possible downward pressure in Auckland," he said.
The kiwi traded at 52.25 British pence from 52.35 pence late yesterday. It was at 4.5655 yuan from 4.5597 yuan and little changed at 78.01 yen. The kiwi rose to 90.11 Australian cents from 89.99 cents. The trade-weighted index was little changed at 72.96.