NZ dollar gains vs euro on timing of ECB rate hikes, falls vs greenback
By Jonathan Underhill
June 15 (BusinessDesk) - The New Zealand dollar rose against a broadly weaker euro after the European Central Bank said
it may not hike interest rates until late 2019 while stronger US retail sales data also helped lift the greenback.
The kiwi dollar gained to 60.24 euro cents as at 8am in Wellington from 59.51 cents late yesterday. It fell to 69.78 US
cents from 70.28 cents and the trade-weighted index slipped to 73.61 from 73.71.
The ECB said it would taper its bond-buying programme down to 15 billion euros a month in the fourth quarter from 30
billion euros a month currently in a move that broadly met market expectations. But it also said there were no plans to
change interest rates until the Northern Hemisphere summer in 2019 - later than expected - and an announcement that was
viewed as more dovish. Meanwhile, US retail sales excluding autos and fuel rose 0.8 percent in May, twice the pace
expected, although the greenback's gains were tempered by renewed concerns about trade tariffs.
"Despite the ECB signalling an upcoming end to QE, the market has interpreted its new time-specific forward guidance
dovishly and sent the euro packing," said Miles Workman, an economist at ANZ Bank New Zealand, in a note. The US retail
sales data suggested "the US economy has well and truly bounded back following a softer winter-weather-induced patch
earlier in the year."
The kiwi rose to 52.56 British pence from 52.46 pence yesterday after UK core retail sales for May jumped 1.3 percent,
month on month, versus expectations for a 0.3 percent gain.
In New Zealand today, traders may focus on the manufacturing PMI report for May, while tonight brings US industrial
production figures for May.
The kiwi rose to 93.24 Australian cents from 92.89 cents late yesterday, when figures showed the number of people
employed in Australia rose by 12,000, undershooting an expected 19,000 increase. It fell to 77.19 yen from 77.40 yen and
declined to 4.4645 yuan from 4.4936 yuan.
(BusinessDesk)
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