close
MENU
Hot Topic Reporting season
Hot Topic Reporting season
1 mins to read

Dollar jumps to two-month high vs euro as ECB seen adding more stimulus

Kiwi touched 60.38 euro cents.

Tina Morrison
Fri, 16 Oct 2015

The New Zealand dollar rose to a two-month high against the euro after a European Central Bank official suggested more stimulus measures were likely for the region.

The kiwi touched 60.38 euro cents, and was trading at 60.27 cents at 8am in Wellington, from 59.41 cents at 5pm yesterday. The local currency advanced to 68.63USc from 68.21USc yesterday as the latest US economic data stoked speculation the Federal Reserve won't lift interest rates soon.

The euro, shared by 19 members of the European Union, tumbled after European Central Bank policymaker Ewald Nowotny said the bank must search for more ways to stimulate the eurozone economy, prompting speculation the European Central Bank may widen the scope of its current programme. The European Central Bank meets next week in Malta although it isn't scheduled to update its quarterly forecasts until December.

"The euro tumbled against all its major trading partners in the aftermath of the remarks causing particularly sharp spikes in Aussie and kiwi as euro/$A and euro/$NZ trades were unwound," Boris Schlossberg, managing director of FX strategy at BK Asset Management in New York, said in a note. "While the market remains dubious about any Fed tightening action this year, the focus may shift on the European Central Bank next week and if European Central Bank president Mario Draghi and company decide to rev up the quantitative easing programme, the euro could come under further selling pressure over the near-term horizon."

In New Zealand today, the focus is on third-quarter inflation data. The consumers price index probably slowed to 0.2% from a 0.4% pace in the second quarter, according to a Reuters poll. Economists will probably firm up their expectations for interest rates following the data, ahead of the next Reserve Bank review on October 29.

The New Zealand dollar advanced to 93.50Ac from 92.78Ac yesterday ahead of the release of the Reserve Bank of Australia's six monthly financial stability review today.

The local currency gained to 44.30 British pence from 44.08 pence yesterday, rose to ¥81.50 from ¥81.20, and increased to 4.3552 yuan from 4.3261 yuan. The trade-weighted index advanced to 73.08 from 72.61 yesterday.

(BusinessDesk)

Tina Morrison
Fri, 16 Oct 2015
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
Dollar jumps to two-month high vs euro as ECB seen adding more stimulus
52534
false