The New Zealand dollar jumped against the euro on signals the European Central Bank is poised to introduce more stimulus to boost inflation.
The kiwi increased to 62.70 euro cents at 8am in Wellington from 62.16 cents at 5pm on Friday. The local currency was at 86.81 US cents at 8am in Wellington, from 86.85 cents at the New York close and 86.37 cents at 5pm on Friday.
European Central Bank president Mario Draghi, speaking after the International Monetary Fund's spring meeting in Washington, warned that further strength in the euro would prompt more stimulus. The ECB earlier this month kept interest rates steady at a record low 0.25 percent and Draghi said its members were unanimous in their willingness to begin quantitative easing if inflation stayed well below their 2 percent target.
Policymakers are concerned that low inflation could hurt the region's economic recovery by reducing consumer spending and making it more difficult to repay debt.
"The NZD/EUR looks set to bounce early this week, given ECB president Draghi's EUR-negative comments over the weekend," Bank of New Zealand currency strategist Raiko Shareef said in a note. "While the currency is not a policy target for the ECB, senior officials have taken to reminding markets about its importance in price stability."
