The New Zealand dollar rose against the British pound and the euro ahead of central bank meetings today amid concerns about faltering economic growth in the region.
The kiwi advanced to 50.29 British pence at 8am in Wellington, from 49.96 pence at 5pm yesterday and increased to 63.33 euro cents from 63.05 cents. The local currency gained to 84.70 US cents from 84.28 cents yesterday.
The pound weakened ahead of the Bank of England meeting today after data showed industrial and manufacturing output grew less than expected in June, cooling expectations the bank will raise interest rates this year. The euro dropped after Italy said it unexpectedly fell into recession again in the second quarter and a report showed German industrial orders slumped at their steepest rate in almost three years in June. Also weighing on the currencies is investor caution over the conflict in Ukraine.
Both the euro and the pound "continued to sink", Boris Schlossberg, managing director of foreign exchange strategy at BK Asset Management in New York, said in a note.
"Overall Eurozone growth may be moving back to zero with periphery economies such as Italy already back in recession," he said. "If Germany, which is the locomotive of the region, is unable to revive demand in the foreseeable future, the ECB may be facing a much greater policy challenge in the second half of this year and may be forced to expand its extraordinary measures far beyond its initial intent."
