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Kiwi up against euro as Draghi dovish

NZ Newswire logoNZ Newswire 6/04/2017 Jonathan Underhill

The New Zealand dollar has risen against the euro after European Central Bank president Mario Draghi said there was no reason to change the bank's policy of ultra-low interest rates and bond buying.

The kiwi rose to 65.46 euro cents as at 8am on Friday in Wellington from 65.28c late Thursday. It traded at US69.66 cents from US69.72c.

Dr Draghi said he saw no reason "to deviate from the indications we have been consistently providing" and the ECB needed to be confident before shifting monetary policy in the economic bloc that inflation picking up.

The ECB's view is at odds with that of Germany's Bundesbank, which argued it was legitimate to discuss ending the ECB's monetary stimulus measures.

Meanwhile, economists expect US non-farm payrolls for March will show the US economy added 180,000 jobs last month, down from 235,000 in February.

"ECB President Draghi was at the dovish end of the spectrum, praising the impact of negative interest rates, and said he saw no reason to depart from the bank's current guidance," said BNZ currency strategist Jason Wong.

Still, the market was keeping its powder dry for tonight's US non-farm payrolls release and would be looking out for news snippets as the Trump-Xi summit begins, he said.

US president Donald Trump and his Chinese counterpart Xi Jinping and their wives were due to dine together at Trump's Mar-a-Lago estate in Florida on Thursday evening, with a series of meetings planned between the two leaders on Friday.

On Friday morning, the New Zealand dollar fell to 92.33 Australian cents from A92.48c. It traded at 4.8027 yuan from 4.8073 yuan, was at 55.86 British pence from 55.82p, and rose to 77.17 yen from 77.04 yen.

The trade-weighted index was at 75.93 from 75.98.

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