NZ dollar falls vs. euro after confidence survey, ECB moves weighed

Tuesday 25th November 2014

The New Zealand dollar declined against the euro after a German business confidence survey printed stronger than expected, prompting some traders to speculate further stimulus in the regional economy isn't a done deal.

The kiwi dollar fell to 63.17 euro cents from 63.65 cents in late Wellington trading yesterday. The New Zealand dollar declined to 78.58 US cents from 78.90 cents.

The kiwi traded at 78.90 US cents at 5pm in Wellington, up from 78.76 cents at 8am, and little changed from 78.81 cents on Friday in New York. The trade weighted index advanced to 78.60 from 78.33 last week. The euro tumbled last week after European Central Bank president Mario Draghi said the bank would do whatever was needed to support the Euro-zone economy. Overnight, ECB executive board member Benoit Coeure said the bank won't make any hasty decisions.

The kiwi-euro "was on the descent from early evening, a move that was exacerbated by a better than expected German IFO release," Bank of New Zealand senior strategist Kymberly Martin said in a note.

The Reserve Bank releases its survey of expectations for the fourth quarter today, which will give a sense of how firms see inflation pressures developing in the economy. Martin said the survey is "likely to confirm inflation expectations are not a pressing concern for a bank that we see being ‘on hold’ until the end of next year."

The kiwi was little changed at 92.95 yen from 93 yen late yesterday. It gained to 91.21 Australian cents from 90.83 cents. The local currency fell to 50.04 British pence from 50.38 pence. The trade-weighted index fell to 78.37 from 78.60.

BusinessDesk.co.nz

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