NZ dollar holds ground against weaker euro as Germany's Merkel signals exit
By Paul McBeth
Oct. 30 (BusinessDesk) - The New Zealand dollar was largely unmoved against a weaker euro as Germany's long-serving Chancellor Angela Merkel said she won't seek another term in charge of Europe's biggest economy.
The kiwi rose as high as 57.56 euro cents and traded at 57.29 cents at 8am in Wellington from 57.31 cents yesterday. It was little changed at 65.27 US cents from 65.32 cents yesterday.
The euro fell about half a US cent and recently traded at US$1.1389 after Merkel said she will stand down as party leader of the Christian Democratic Union, and won't seek re-election at the 2021 election. The CDU is currently the senior partner in a coalition government, and Merkel is in her fourth term as Germany's leader, having steered the country through the global financial crisis and Europe's debt crisis. The regional bloc is currently negotiating the exit of the UK and facing increasing demands for greater autonomy from some of its member states.
"The euro slipped overnight after news that German Chancellor Merkel will not seek another term," ANZ Bank New Zealand economists Miles Workman and Liz Kendall said in a note. "Expect whippy price action to continue, with plenty in the political space to drive moves."
Local data today include September quarter property transfer statistics.
The US Dollar Index gained 0.3 percent while stocks on Wall Street extended their slide. Tech stocks including Amazon, Google-parent Alphabet, and Netflix posted sharp declines. Facebook will report quarterly earnings this week.
The kiwi traded at 50.97 British pence from 50.88 pence yesterday after UK chancellor Philip Hammond's budget lowered projected deficits and upgraded the growth outlook for the economy.
The local currency rose to 92.44 Australian cents from 92 cents yesterday and to 73.32 yen from 73.08 yen. It increased to 4.5431 Chinese yuan from 4.5411 yuan yesterday.