NZ dollar slips against euro as German business confidence lifts

Monday 25th November 2013

The New Zealand dollar slipped against the euro, touching its lowest this month, after a report on Friday showing better than expected German business sentiment increased optimism about Europe's largest economy.

The kiwi dropped to 60.07 euro cents over the weekend, its lowest level since Oct. 31. It was at 60.37 euro cents at 8am in Wellington, from 60.97 cents on Friday. The local currency slid to 81.83 US cents from 81.93 cents at the New York close and 82.12 cents in Wellington on Friday.

The euro gained after the German IFO business climate index for November rose to its highest level since April 2012. That boosted investor confidence that fourth quarter German economic growth would help stimulate other European economies.

"Friday's November IFO helped buoy the appeal of the euro," Mike Jones, currency strategist at Bank of New Zealand, said in a note. "The rise in the headline business climate index from 107.4 to 109.3 (107.7 expected) placed the index at the highest level since April 2012."

The latest report follows a ZEW survey which showed German investor sentiment at its highest in four years and a purchasing managers' index suggesting the private sector's expansion was gaining traction.

Reports scheduled for release in the US today include pending home sales for October and the Dallas Fed factory index for November.

The New Zealand dollar slipped to 89.16 Australian cents at 8am in Wellington from 89.36 cents on Friday. The kiwi dropped to 82.87 yen from 83.15 yen on Friday ahead of a speech by Bank of Japan governor Haruhiko Kuroda at the Paris Europlace International Financial Forum in Tokyo today. The local currency fell to 50.39 British pence from 50.73 pence on Friday while the trade-weighted index weakened to 76.84 from 77.15.

BusinessDesk.co.nz

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