Dollar gains after ECB stays pat on stimulus
Dollar gained, following the euro higher.
The New Zealand dollar gained, following the euro higher, after the European Central Bank refrained from injecting more stimulus into the sluggish regional economy, and ahead of US employment data, which is closely watched by the market.
The kiwi rose to 77.80 US cents at 8am in Wellington from 77.46 cents yesterday. The trade-weighted index advanced to 78.32 from 78.07 yesterday.
The euro rallied against the greenback after investors were disappointed ECB president Mario Draghi didn't expand its asset purchase programme, currently consisting of covered bonds and asset-backed securities, to include sovereign debt. The European currency later pared those gains after a report said bank officials were preparing to ease policy in January. The greenback is likely to get a boost if non-farm payrolls data on Friday in Washington continue to show strength in the world's biggest economy, as expectations for a US rate hike next year build.
"Everyone was disappointed the ECB didn't deliver on anything at this meeting and everyone was short euro, so that squeezed higher," said Raiko Shareef, currency strategist at Bank of New Zealand in Wellington. "It's strange the kiwi followed to the extent that it did, and shows how difficult it is to test 77 (US cents) at the moment."
BNZ's Shareef said the currency could fall below 77 US cents if the US payrolls report shows the world's biggest economy added more than 250,000 jobs in November.
New Zealand wholesale trade figures for the third quarter are due today, but are unlikely to have much impact on the market.
The local currency rose to 92.78 Australian cents at 8am in Wellington from 92.30 cents yesterday, and BNZ's Shareef said the negative sentiment about the Australian economy could push the kiwi high on that cross-rate.
New Zealand's currency gained to 93.23 yen from 92.87 yen yesterday, and was little changed at 62.90 euro cents from 62.93 cents. It advanced to 49.63 British pence from 49.40 pence yesterday.
(BusinessDesk)
Paul McBeth
Fri, 05 Dec 2014
Fri, 05 Dec 2014
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Dollar gains after ECB stays pat on stimulus
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