Sharechat Logo

NZ dollar in tight range as Europe rejects Italian budget

Wednesday 24th October 2018

Text too small?

The New Zealand dollar traded in a relatively tight range after Europe rejected Italy's plans to run budget deficits, stoking fears over the region's growth. 

The kiwi traded at 65.56 US cents as at 8am in Wellington from 65.40 cents yesterday. It was little changed at 57.13 euro cents from 57.09 cents. 

Stock markets in Europe dropped with Germany's DAX 30 index down 2.2 percent as the European Commission rejected Italy's plan to incur a budget deficit of 2.4 percent of gross domestic product in 2019. Italy has three weeks to come up with an alternative, although Prime Minister Giuseppe Conte has said he can't accept substantial change. The yield on Italian 10-year government bonds rose 2 basis points to 3.6 percent. 

Wall Street was more muted, with the Dow Jones Industrial Average down 0.1 percent in late trading after several companies, including Caterpillar, 3M and Hasbro missed earnings expectations. Added geopolitical uncertainty has been reflected in financial markets, with the VIX, known as Wall Street's fear gauge, recently at 20.55 compared to a 20-year moving average of 13.31. 

"Kiwi is sitting a touch higher, even with markets in risk-off mode and commodity prices lower, with this cross finding some stability after recent USD strength," ANZ Bank New Zealand economists Liz Kendall and Miles Workman said in a note. "More USD strength is possible, and we see this cross lower in time, but price action is likely to be choppy."

No local data is scheduled for today. 

The kiwi traded at 92.51 Australian cents from 92.55 dollars yesterday and increased to 4.5474 Chinese yuan from 4.5385 yuan. It was little changed at 50.47 British pence from 50.44 pence yesterday and edged up to 73.70 yen from 73.60 yen. The trade-weighted index was at 71.90 from 71.82 yesterday. 

(BusinessDesk)



  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
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:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report