NZ dollar gains vs euro as ECB's Draghi notes moderating growth
By Paul McBeth
April 27 (BusinessDesk) - The New Zealand dollar rose against the euro after European Central Bank president Mario
Draghi acknowledged a moderation in the regional economy's growth while keeping rates on hold and pledging to keep its
asset purchase programme in place until at least September.
The kiwi rose to 58.32 euro cents as at 8am in Wellington from 57.69 cents yesterday. The local currency traded at 70.62
US cents from 70.56 cents yesterday.
The ECB kept monetary policy unchanged in its latest review and affirmed forward guidance, meeting analysts'
expectations. Draghi said the economic recovery still supports inflation returning to target and noting "some moderation
in growth". Draghi said the ECB governing council "didn't discuss monetary policy per se", focusing instead on examining
the health of the economy, and analysts expect the central bank will announce plans to start dialling back its asset
purchase programme in June or July.
"The ECB remains cautious, noting the recent soft patch in growth. This saw the euro soften and this cross (NZ
dollar-euro) lift off support levels," ANZ Bank New Zealand chief economist Sharon Zollner and senior macro strategist
Phil Borkin said in a note. "However, the ECB’s constructive medium-term views don’t appear to have changed, and we see
this cross heading lower in time."
US data overnight showed initial jobless claims in the US were better than expected, suggesting a stronger labour market
in the world's biggest economy, while durable goods orders were also ahead of forecast. The yield on US 10-year
Treasuries fell 4 basis points to 2.98 percent, while stocks on Wall Street rallied with strong earnings from tech
companies including Facebook.
Local data today include a consumer confidence survey and March merchandise trade figures.
The kiwi rose to 93.51 Australian cents from 93.19 cents yesterday and gained to 4.4737 Chinese yuan from 4.4625 yuan.
It traded at 77.24 yen from 77.15 yen yesterday and edged up to 50.74 British pence from 50.61 pence. The trade-weighted
index increased to 73.44 from 73.28 yesterday.
(BusinessDesk)