Sharechat Logo

NZ dollar falls vs euro as EU inflation, jobless data add to case for QE 'tapering'

Tuesday 1st August 2017

Text too small?

The New Zealand dollar fell to a two-week low against the euro after a slight dip in European Union unemployment and stronger inflation added to the case for the European Central Bank to begin dialing back its quantitative easing programme.

The kiwi dollar fell to 63.44 euro cents from 63.95 cents late yesterday. The local currency was little changed at 75.09 US cents from 75.06 cents yesterday, having reached a two-year high of 75.58 cents last week.

EU core inflation picked up to 1.2 percent year-on-year in July from 1.1 percent the previous month while the jobless rate fell to 9.1 percent in June, below the forecast 9.2 percent. In the face of upheavals in the White House and speculation the Federal Reserve is less certain about a third rate hike this year, the euro reached its highest level since January 2015 overnight.

"Whilst the data is encouraging, we remain of the view that the ECB will be very slow to change policy," said David Croy, senior rates strategist at ANZ Bank New Zealand, in a note. "The USD continues to come under attack, mainly, by the look of it, on the back of the unstable domestic political situation."

Adding to the downward pressure on the greenback, "the Fed is backpedalling," he said.

With no domestic data due out today, traders will be watching for the Reserve Bank of Australia's interest rate review today. 

"Nobody expects a move, but the market had gotten itself whipped up into a frenzy about hikes being just around the corner and that’s simply not going to happen, so a further easing of expectations is likely, and that will bias NZ rates and the NZD down a tad," he said.

The kiwi fell to 93.86 Australian cents from 94.06 cents yesterday. It slid to 82.80 yen from 82.96 yen and declined to 56.84 British pence from 57.16 pence. It traded at 5.0491 yuan from 5.0495 yuan.

The trade-weighted index slipped to 78.85 from 78.97.

(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