NZ dollar jumps to 3-month high vs. euro after ECB's signals further easing likely

Friday 23rd October 2015

The New Zealand dollar jumped to a three-month high against the euro on speculation the European Central Bank may ease monetary conditions further.

The kiwi touched 61.06 euro cents, and was trading at 60.97 cents at 8am in Wellington, from 59.58 cents at 5pm yesterday. The local currency edged up to 67.76 US cents from 67.61 cents yesterday.

The European common currency tumbled after ECB president Mario Draghi said that while the bank would keep rates on hold at this month's meeting, it would review in December what more it could do to tackle the threat of weak inflation. The ECB discussed a further interest rate cut at yesterday's meeting and was ready to act, he said.

"ECB President Draghi stole the show overnight, all but promising further policy easing at the December meeting," Bank of New Zealand currency strategist Raiko Shareef said in a note. "Euro is nursing its bruises."

Today, traders will be eyeing measures of October manufacturing activity scheduled for release in Germany, Europe, the US and Japan.

The New Zealand dollar advanced to 93.95 Australian cents from 93.46 cents yesterday, gained to 44.03 British pence from 43.80 pence, increased to 81.81 yen from 80.98 yen and rose to 4.3080 yuan from 4.2922 yuan. The trade-weighted index increased to 73.05 from 72.61 yesterday.

BusinessDesk.co.nz

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