NZ dollar falls against broadly stronger greenback after Draghi comments

By Jonathan Underhill

The kiwi fell to 71.91 US cents as at 8:30am in Wellington, from 72.40 cents late yesterday.
The kiwi fell to 71.91 US cents as at 8:30am in Wellington, from 72.40 cents late yesterday.

The New Zealand dollar fell against a broadly stronger US dollar after the European Central Bank said it was in no hurry to end quantitative easing measures.

The kiwi fell to 71.91 US cents as at 8:30am in Wellington, from 72.40 cents late yesterday. The trade-weighted index slipped to 77.37 from 77.58.

See live rates for the NZ-US $ below. Click for more information:NzForex Foreign Exchange Transfers

The ECB kept its policy settings unchanged, with a refinancing rate at zero. President Mario Draghi said the bank would probably 'taper' its QE measures, which Bloomberg reported as meaning the stimulus programme could run beyond its March 2017 end date. The US dollar index rose about 0.4 per cent to a 7-month high. The kiwi dollar extended its gains against the Australian dollar after that country's weaker-than-expected labour market report yesterday.

ECB policy "was left unchanged, as expected, but Draghi also confirmed QE would not end abruptly. EUR fell, the US dollar rose, and AUD and NZD are lower," said Imre Speizer, market strategist at Westpac Banking Corp.

The kiwi traded at 94.41 Australian cents, from 94.34 cents yesterday, which was the highest since Oct. 10.

The Australian economy shed 9,800 jobs in September from August, following a 9,000 drop the previous month. The unemployment rate unexpectedly fell to 5.6 percent, although that largely reflected a decline in the participation rate. While traders expect the Reserve Bank of Australia is done cutting rates for now, a cut is still seen as a risk. By contrast, a rate cut by the New Zealand central bank next month is largely priced into the currency, traders said.

The kiwi dollar fell to 58.70 British pence from 58.90 pence yesterday. It slipped to 65.83 euro cents from 65.96 cents and fell to 74.77 yen from 74.96 yen. The kiwi declined to 4.8516 yuan from 4.8773 yuan.

- BusinessDesk

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