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NZ dollar climbs vs. euro on Weidmann comments, weakens against greenback

Thursday 18th April 2013

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The New Zealand dollar rose against the euro after Bundesbank President Jens Weidmann said the European Central Bank may cut interest rates if data warrants and European stocks tumbled.

The kiwi rose to 64.75 euro cents from 64.18 cents at 5pm in Wellington yesterday. It fell to 84.36 US cents from 84.61 cents.

In an interview with the Wall Street Journal, Bundesbank President Weidmann signalled the European Central Bank could reduce interest rates if economic and inflation data suggest it is warranted. His comments added to negative sentiment about the euro-zone after reports Germany's credit rating might be cut and UK joblessness rose by 70,000 to 2.56 million in the three months through February.

Shares fell on Wall Street after disappointing earnings from firms including Bank of America. The US Dollar Index rose to 82.65 as risk appetite waned.

"As risk aversion returned overnight the USD was stronger against all its peers," said Kymberly Martin, strategist at Bank of New Zealand, in a note. "European currencies were the weakest performers."

The trade-weighted index edged up to 77.89 from 77.80. The kiwi rose to 81.90 Australian cents from 81.69 cents and fell to 82.66 yen from 83.20 yen. It rose to 55.33 British pence from 55.09 pence.

BusinessDesk.co.nz

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