Dollar little changed as traders mull ECB's pledge

The New Zealand dollar was little changed in quiet trading with Japanese markets closed and as traders mulled European Central Bank president Mario Draghi's pledge to do what was needed to support the region's economy.

The kiwi traded at 78.90 US cents at 5pm in Wellington, up from 78.76 cents at 8am, and little changed from 78.81 cents on Friday in New York. The trade-weighted index advanced to 78.60 from 78.33 last week.

The euro fell after Draghi said policy makers "will do what we must to raise inflation and inflation expectations as fast as possible," stoking the prospect of quantitative easing in the euro-zone to shore up the regional economy. The ECB has already cut interest rates and has been buying covered bonds to inject some life into the regional economy, and a move towards quantitative easing comes as its US counterpart, the Federal Reserve, has already stopped printing money and is poised to start raising rates next year.

"People are trying to digest the European news from Friday," said Martin Rudings, senior dealer foreign exchange at OMF in Wellington. "That's why the kiwi's been left alone a little bit - the uglier currencies are coming to the forefront."

OMF's Rudings said the local currency will probably trade between 78.30 US cents and 79.30 cents in the Northern Hemisphere session.

Government figures showed New Zealand's strong inbound migration continued in October, with returning expats and Indian students driving the inflow.

The kiwi rose to 93 yen at 5pm in Wellington from 92.84 yen on Friday in New York with Japanese banks closed for Labor Thanksgiving Day.

The local currency was little changed at 90.83 Australian cents from 90.85 cents last week, and traded at 63.65 euro cents from 63.54 cents. It was little changed at 50.38 British pence from 50.33 pence last week.

(BusinessDesk)

Paul McBeth
Mon, 24 Nov 2014

Categories

Analysis

Featured

Dollar little changed as traders mull ECB's pledge