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
- Auckland leisure centres axe unhealthy drinks from vending machines
- Trustpower loses Supreme Court tax dispute
- Trump’s close financial & political ties with Russia will ultimately hurt him, security expert says
- Sir Peter Leitch's message to Mad Butcher stores: 'Look in the mirror'
- Pushpay director says why he bought $1.8m worth of shares
Most listened to
- InternetNZ boss's two problems with TPP legislation
- Responsible Investment Association Australasia CEO Simon O’Connor on why responsible investment is here to stay
- Security expert Paul Buchanan on why Trump's glee over the Russian DNC hack could backfire
- Forty years of punitive drug prohibition has failed ‘by any measure’, says Ross Bell – so let’s decriminalise the lot
- With MediaWorks reportedly closing in on a CEO candidate, NBR’s Nick Grant opines on what the role requires