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The New Zealand dollar held gains against the euro and pound as investors await central bank meetings in Europe and the UK with that region struggling to recover from its sovereign debt crisis.
The kiwi rose to 65.60 euro cents at 5pm in Wellington from 65.30 cents yesterday and held near a record at 55.69 British pence from 55.10 pence. The local currency traded at 84.04 US cents at 5pm from 84.12 cents at 8am and 84.03 cents yesterday.
Traders are waiting for the European Central Bank and Bank of England monetary policy meetings tomorrow after more weak data painted a poor picture of the region’s economy. Though neither central bank is tipped to cut rates or expand asset purchases, they may give more insight into how the region’s tracking after the latest bailout of a euro-zone member, Cyprus.
The ECB and BoE “will be quite happy their currencies are drifting off,” said Tim Kelleher, head of institutional FX sales at ASB Institutional in Auckland. “The kiwi is still maintaining its strength on the crosses.”
Kelleher said the local currency may drift off against the greenback with non-farm payrolls scheduled for the end of the week, and as US economic data starts showing signs of life, though it’s still in a wider range of between 82 US cents and 85 cents.
“It’s quite clear the US economy is turning around quite sharply, and the USS dollar continues to strengthen,” he said.
The kiwi increased to 80.36 Australian cents at 5pm in Wellington from 80.24 cents yesterday after Australia reported a smaller than expected trade deficit of A$178 million in February.
The Bank of Japan will review monetary policy tomorrow and may expand its asset purchase programme in preparation for incoming governor Haruhiko Kuroda to take a more active role. The kiwi climbed to 78.60 yen from 77.92 yen yesterday.
The trade-weighted index advanced to 77.18 from 76.92.
(BusinessDesk)