NZ dollar rises to month-high vs. euro after ECB's Draghi stokes stimulus bets

Monday 23rd November 2015

The New Zealand dollar rose to a month high against the euro after comments by European Central Bank president Mario Draghi stoked expectations the bank may add more stimulus to boost the regional economy.

The kiwi touched 61.77 euro cents, and was trading at 61.58 cents at 8am in Wellington, from 61.46 cents at 5pm on Friday. The local currency slipped to 65.56 US cents from 65.63 cents at the New York close and 65.87 cents on Friday in Wellington after New York Federal Reserve head William Dudley reiterated comments from other Fed officials that the US should "soon" be ready to raise interest rates.

The euro tumbled after ECB chief Draghi suggested on Friday that the bank would do whatever it takes to raise inflation as fast as possible. That stoked speculation the ECB may expand its quantitative easing programme at its meeting next month.

"The euro was under renewed pressure on Friday night as ECB President Draghi said that policymakers would 'do what we must to raise inflation as quickly as possible',” Bank of New Zealand senior market strategist Kymberly Martin said in a note. "The euro declined, as an expansion of ECB easing at the Bank’s Dec meeting looks likely."

In New Zealand today, October tourism and migration data is scheduled for release at 10:45am, with analysts keen to see if record migration is near its peak.

The New Zealand dollar weakened to 90.53 Australian cents from 91.47 cents on Friday, advanced to 43.16 British pence from 43.09 pence, slipped to 80.47 yen from 80.97 yen, and dropped to 4.1850 yuan from 4.2029 yuan. The trade-weighted index was at 71.30 from 71.36 on Friday.

BusinessDesk.co.nz

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