The New Zealand dollar advanced against the euro after the European Commission slashed its growth forecasts and retail sales across the region fell. The kiwi gave up its gains against the greenback as stocks tumbled.
The currency traded at 82.57 US cents from 82.54 cents at 5pm in Wellington yesterday. It rose above 83 cents overnight. It rose to 64.66 euro cents from 64.31 cents.
The European Commission slashed its forecast for growth in the 17-nation economy to just 0.1% in 2013, from a May prediction of 1%, while trimming its forecast for Germany to 0.8% from 1.7%. Retail sales in the euro region fell a greater-than-expected 0.2% in September.
The kiwi initially rose as US President Barack Obama won a second term in office, though concern at the so-called fiscal cliff of tax increases and spending cuts eroded optimism and the Dow Jones Industrial Average fell 2%.
"Protracted uncertainty will likely negatively impact risk appetite, potentially undermining demand for the NZD/USD," says Kymberly Martin, market strategist at Bank of New Zealand.
"Rating agencies have been quick to reiterate that unless the US comes up with a credible long-term debt reduction plan the sovereign's rating will slip."
New Zealand traders are awaiting the release today of the household labour force survey, which is expected to show the jobless rate eased to 6.7% from 6.8% while jobs growth sped to 0.3%.
The trade-weighted index rose to 73.92 from 73.77 and the kiwi gained to 79.29 Australian cents from 79.07 cents. It rose to 51.65 British pence from 51.55 pence and fell to 65.97 yen from 66.17 yen.
This article is tagged with the following keywords. Find out more about MyNBR Tags
- Shareholders approve completing $400m Central Plains irrigation scheme in 2018
- Edmund Hillary Fellowship chosen to deliver migrants for new entrepreneur visa
- EQC boss Ian Simpson to leave at the end of the year to head up GNS
- Court rules against Chinese investor over $7.3m Auckland property deal
- Marlborough displaces Central Otago for best Pinot Noir in world competition
Most listened to
- Ironically, Trump showed the lack of stamina he had accused Clinton of, says NBR's Rob Hosking
- NZX market surveillance manager Fraser Wyeth gives evidence at the Warminger trial
- Hellaby shareholder Aaron Bhatnagar says why he thinks Bapcor's offer is too low
- No knockout blows in first presidential debate, says NBR's Nevil Gibson
- Intueri's problems raise questions for the board, says Martin Watson of the Shareholders Association