NZ dollar slides ahead of ECB, BoE meetings

The New Zealand dollar fell to 81.82 US cents overnight. Photo / File
The New Zealand dollar fell to 81.82 US cents overnight. Photo / File

The New Zealand dollar fell ahead of meetings by the European Central Bank and the Bank of England tonight and US payrolls data tomorrow that will provide more clues to the central bank response in Europe and the strength of the world's biggest economy.

The New Zealand dollar fell to 81.82 US cents from 82.22 cents at 5pm in Wellington yesterday. The trade-weighted index dipped to 73.17 from 73.43.

The ECB meets for the first time since confirming its bond buying programme last month and traders will be looking for signs it is prepared to provide more stimulus to the Eurozone economy.

The US jobless rate is forecast to have risen to 8.2 per cent while payrolls increased by 115,000 in September, less than the 139,000 average over the first eight months of the year. Ahead of the US jobs data, the Federal Open Market Committee minutes are due for release tomorrow.

"For the most part, these moves appear to reflect profit taking and speculative position adjustments as we head into a busy period for event risk," said Mike Jones, a strategist at Bank of New Zealand.

With the kiwi having broken through a key support level of 81.85 US cents, "we could see a deeper correction back towards 80" cents, he said.

Events overnight should have been supportive for the kiwi and for growth assets. Stocks on Wall Street gained after the ADP National Employment Report showed US private payrolls rose by 162,000 in September, beating estimates. The Institute for Supply Management's non-manufacturing index advanced to 55.1 in September, from 53.7 in August, also beating forecasts.

The kiwi dollar fell to 63.39 euro cents from 63.73 cents and fell to 50.90 British pence from 50.97 pence.

The local currency fell to 80.18 Australian cents from 80.41 cents and traded at 64.22 yen from 64.28 yen.

- BusinessDesk

© Copyright 2014, APN New Zealand Limited

Assembled by: (static) on red akl_n4 at 17 Apr 2014 21:55:21 Processing Time: 842ms