Sharechat Logo

NZ dollar falls from recent highs as ECB leaves policy unchanged

Friday 9th September 2016

Text too small?

The New Zealand dollar retreated from a 16-month high as some traders deemed it had risen too far, too fast, and after the European Central Bank disappointed the market by not flagging any additional easing measures.

The kiwi dropped to 73.91 US cents as at 8am in Wellington, from 74.57 cents late yesterday. The currency fell to 65.67 euro cents from 66.30 cents.

The kiwi had gained almost 2 percent in the past week on a trade-weighted basis as relatively robust economic data and gains in prices of dairy products and other commodities lifted sentiment for the currency in the face of weak data in the US and elsewhere. It fell against the euro after ECB president President Draghi was more upbeat that expected in the bank's review of monetary policy and failed to make mention of any extra stimulus plans.

"The kiwi has just run out of puff - it's had a few days of phenomenal strength," said Philip Borkin, senior economist at ANZ Bank New Zealand. "We don't think really much has changed in the reasons the New Zealand dollar was strong to begin with - the data is great, growth looks good and there's a lack of desire to push the US dollar much higher."

Borkin said the ECB "arguably disappointed by not doing anything".

The trade-weighted index fell to 78.33 from 78.84 late yesterday, to remain above the average 76 level the Reserve Bank has projected for the third quarter.

The kiwi slid to 96.68 Australian cents from 97.12 cents and declined to 55.58 British pence from 55.88 pence. It traded at 75.74 yen from 75.73 yen and fell to 4.9260 yuan from 4.9721 yuan.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

Sky shares plunge to all-time low as Spark steals cricket rights
Fonterra looking to lift China's importance in new strategy
A2, Synlait shares climb as takeover bid revives optimism about Chinese appetite for milk
Service sector activity eases in August but still expanding
Lumpy imports drive bigger July trade deficit than expected
Nimbys, carparks and the status quo under threat as govt tells big cities: grow up and out
Dairy manufacturers got better prices in June quarter
Orr defends RBNZ rate cut, says monetary policy looks ahead, not behind
RBNZ's Orr says investors need to put their money to work
Auckland building consents hit record in year to June

IRG See IRG research reports