Kiwi holds near multi-month highs against euro, pound
The New Zealand dollar holds near multi-month highs as investors prepare for a European Central Bank rate cut and more quantitative easing from the Bank of England.
BUSINESSDESK: The New Zealand dollar held near multi-month highs against the euro and pound as investors prepare for a rate cut by the European Central Bank and more quantitative easing from the Bank of England when US markets are closed.
The kiwi held rose to 51.33 pence from 51.19 pence yesterday and advanced to 63.92 euro cents from 63.81 cents. That is near a two-month high against pound and a four-month high against the euro.
The currency was little changed at 80.49 US cents at 5pm from 80.38 cents at 8am and 80.40 cents yesterday.
Markets are expected to be quiet tomorrow, with Wall Street closed for the US Independence Day holiday and investors are gearing up for looser monetary policy at the British and European central banks.
The Bank of England is tipped to expand its asset purchase programme £50 billion to £375 billion in a bid to lift Britain out of its double-dip recession, while the ECB is expected to trim its benchmark rate a quarter-point to 0.75%, according to Bloomberg surveys.
"If we get more QE and a rate cut, we should see the kiwi push up against those currencies," said Chris Tennent-Brown, FX economist at Commonwealth Bank of Australia in Sydney.
"The kiwi/euro and kiwi/pound [cross-rates] have certainly picked up and the risks are to the upside."
The central bank meetings, scheduled for later tomorrow in Europe, come after the Reserve Bank of Australia left its target cash rate unchanged at 3.5% yesterday, while reducing its outlook for international growth.
The kiwi fell to 78.17 Australian cents from 78.34 cents yesterday.
Trading has been thin this week because of the looming US holiday, though American employment figures on Friday are expected to weigh on traders. Non-farm payrolls grew by 90,000 last month, according to a Reuters survey of economists.
The kiwi rose to 64.18 yen from 64.08 yen yesterday, and the trade-weighted index was little changed at 72.57 from 72.53.
Paul McBeth
Wed, 04 Jul 2012
Wed, 04 Jul 2012
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Kiwi holds near multi-month highs against euro, pound
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