Sharechat Logo

NZ dollar falls to 4-month low against euro on reports of ECB rate-hike talk

Monday 13th March 2017

Text too small?

The New Zealand dollar fell to a four-month low against the euro after reports that the European Central Bank may begin raising interest rates even before the end of its quantitative easing programme.

The kiwi dollar traded at 64.82 euro cents as at 8am in Wellington, and earlier touched 64.67 cents, the lowest since Nov. 9, from 65.16 cents on Friday. The local currency traded at 69.31 US cents from 69.28 cents in New York on Friday, having touched as low as 68.87 cents last week.

Bloomberg News and Reuters reported that some ECB policymakers discussed the possibility of hiking interest rates from record low levels before the end of the bank's massive bond-buying programme. Bloomberg reported that forward swaps based on the Euro Overnight Index Average are pricing 10 basis points of rate increase by April next year, compared with less than three at the end of last month.  Meanwhile, US non-farm payrolls for February showed the US economy added 235,000 jobs last month, more than the 200,000 expected and stoking expectations the Federal Reserve will start hiking rates this week.

"US non-farm payrolls figures were solid, but not strong enough for the market to price in more than the near three hikes currently for 2017," said Philip Borkin, senior economist at ANZ Bank New Zealand. The euro outperformed "after unnamed sources within the ECB said they discussed raising interest rates before the end of QE at its meeting last week."

Locally, data out this week includes fourth-quarter gross domestic product on Thursday, which is expected to show the economy slowed to a 0.5 percent pace from 1.1 percent in the third quarter and below the central bank's 1 percent forecast. Ahead of that are food prices for February, out today, consumer confidence for the first quarter tomorrow and fourth-quarter balance of payments on Wednesday.

The trade-weighed index was at 75.98 from 75.91 on Friday.

The kiwi traded at 91.85 Australian cents from 91.74 cents in New York on Friday.  It was at 4.7859 yuan from 4.7852 yuan and 79.47 yen from 79.45 yen. It was at 56.92 British pence from 56.88 pence last week.

  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:

Steel & Tube Fy20 Trading Update
Further Contract Win Strengthens Scott Technology’s Position In Mining Sector
China’s Assertiveness Is Becoming a Problem for Its Friends, Too
New Talisman - Chairman’s Address to AGM 2020 August 6, 2020
T&G reports its 2020 Interim Results
Gold price hits $2,000 for first time on Covid
TruScreen strengthens its market presence in central and eastern Europe
Refining NZ announces non-cash impairment
Ryman Healthcare COVID-19 update Victoria
Talisman Quarterly Activities Report to 30 June 2020

IRG See IRG research reports