NZ dollar gains on Euro woes

Written by admin on 30/07/2019 Categories: 苏州美睫

The New Zealand dollar advanced against the euro after European Central Bank president Mario Draghi signalled the bank was ready to take further steps to counter low inflation.


The New Zealand dollar advanced to 62.25 euro cents at 8am in Wellington on Friday from 62.09 cents at 5pm a day earlier.

It edged lower to 85.38 US cents from 85.43 cents ahead of key US employment data which may show the world’s largest economy added the most number of jobs in a month since November.

The European common currency shared by 18 countries weakened after Mr Draghi said quantitative easing, another rate cut, negative deposit rates and a narrower rate corridor were all discussed at the central bank’s monthly meeting where it kept interest rates unchanged at 0.25 per cent.

The ECB is concerned about continued low inflation after consumer prices held below 1 per cent for a sixth month in March.

The latest statement “makes clear that the ECB is ready to step into unchartered waters if inflation continues to disappoint”, said Raiko Shareef, currency strategist at Bank of New Zealand.

“The ECB’s governing council is now ‘unanimous in its commitment’ to use unconventional policy tools.”

US employment data out on Friday is expected to show payrolls grew by 200,000 in March after a gain of 175,000 in February, Mr Shareef said.

The New Zealand dollar weakened to 92.50 Australian cents, from 92.66 cents after Reserve Bank of Australia governor Glenn Stevens reiterated comments that there were encouraging signs of growth as the economy rebalances away from mining.

The kiwi advanced to 51.46 British pence from 51.34 pence after the UK’s services Purchasing Managers’ Index for March dropped for a fourth consecutive month and it dipped to 88.70 yen from 88.81 yen. The trade-weighted index was little changed at 79.95 from 79.94.

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