By Paul McBeth
Oct. 26 (BusinessDesk) - The New Zealand dollar gained against the euro as European Central Bank officials were unmoved by mounting fears over growth and stuck to their planned tightening track.
The kiwi increased to 57.33 euro cents as at 8am in Wellington from 57.15 cents yesterday. It rose to 50.83 British pence from 50.59 pence.
The euro fell 0.2 percent against the greenback after the ECB affirmed plans to end its quantitative easing programme this year and said it still expects to keep the key rate on hold until at least the middle of the year.
Investors have been wary about the threat to growth posed by protracted Brexit negotiations and Italy's plans to run a bigger budget deficit than allowed by European Union rules. Still, ECB president Mario Draghi said risks to the region haven't escalated to the point where the central bank will change its core outlook.
"Following affirmation from the ECB about the path of policy, EUR slid, including against this cross," ANZ Bank New Zealand senior economist Liz Kendall said, referring to the kiwi/euro cross-rate. "With Italian and Brexit dramas continuing, more upward momentum in this cross is possible."
Meanwhile, the pound was weaker despite UK Prime Minister Theresa May holding a successful meeting with Conservative backbench MPs as she attempts to avert a leadership challenge.
"The task of negotiating a Brexit deal that will satisfy both the EU and Prime Minister May’s party remains difficult," Kendall said in a note. "Actions speak louder than words as the EU and UK prepare for the possibility of no deal."
The local currency traded in a tight range against the greenback as stocks on Wall Street rallied. The Nasdaq was up 3.4 percent in late trading, recovering some of yesterday's loss. The tech-heavy index officially entered a correction yesterday, having dropped 10 percent from its peak. The kiwi traded at 65.13 US cents from 65.22 cents yesterday.
Local data today include the September quarter household prices index.
The kiwi traded at 91.96 Australian cents from 92.07 cents yesterday and rose to 73.34 yen from 73.09 yen. It decreased to 4.5250 Chinese yuan from 4.5278 yuan. The trade-weighted index was at 71.59 from 71.60.