The New Zealand dollar advanced against the euro after European Central Bank president Mario Draghi signalled the bank was ready to take further steps to counter low inflation.
The New Zealand dollar advanced to 62.25 euro cents at 8am in Wellington from 62.09 cents at 5pm yesterday. The local currency edged lower to 85.38 US cents from 85.43 cents yesterday ahead of key US employment data which may show the world's largest economy added the most number of jobs in a month since November.
The European common currency shared by 18 countries weakened after Draghi said quantitative easing, another rate cut, negative deposit rates and a narrower rate corridor were all discussed at the central bank's monthly meeting where it kept interest rates unchanged at 0.25 percent. The ECB is concerned about continued low inflation after consumer prices held below 1 percent for a sixth month in March.
The latest statement "makes clear that the ECB is ready to step into unchartered waters if inflation continues to disappoint," Raiko Shareef, currency strategist at Bank of New Zealand, said in a note. "The ECB's governing council is now 'unanimous in its commitment' to use unconventional policy tools."
Tonight, all eyes will be on the US employment data which is expected to show payrolls grew by 200,000 in March after a gain of 175,000 in February, Shareef said.
