Kiwi hits two-week high over euro

The kiwi rose to US66.84c at 5pm yesterday from US66.27c a week ago in New York. Photo / iStock

The New Zealand dollar rose to its highest level against the euro in more than a week after European Central Bank president Mario Draghi suggested it may add more stimulus.

The kiwi touched 59.83 euro cents, and was trading at 59.62 cents at 8am in Wellington, from 59.32 cents at 5pm yesterday.

The local currency was little changed at 66.53 US cents from 66.55 cents yesterday with US markets closed on Monday for the Presidents' Day holiday.

The euro, shared by 19 of the European Union's member states, declined after the ECB's Draghi told lawmakers in the European parliament that the bank is ready to ease policy further at its meeting in March. The ECB, which has missed its inflation target of close to 2 percent for the past three years, is concerned its goal may be further hindered by financial market volatility, slower global growth and low oil prices.

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"The euro fell overnight and New Zealand dollar strengthened," ANZ Bank New Zealand senior economist Mark Smith and senior foreign exchange strategist Sam Tuck said in a note. "Euro falls were aided by Draghi reiterating March is live for the ECB."

ANZ expects the kiwi to trade between 59.20 euro cents and 60.40 cents today.

In New Zealand today, fourth quarter retail sales data is scheduled for release at 10:45am. It's expected to show retail sales volumes advanced 1.4 percent in the fourth quarter, according to a Reuters poll of economists.

The Reserve Bank publishes its survey of inflation expectations at 3pm. Tonight, the focus will be on the overnight GlobalDairyTrade auction, where prices for New Zealand's largest export commodity are expected to decline further.

In Australia today, the Reserve Bank releases the minutes to its last meeting, and a consumer confidence survey is also published.

The New Zealand dollar advanced to 93.07 Australian cents from 92.95 cents yesterday, gained to 76.26 yen from 75.81 yen, increased to 46.05 British pence from 45.82 pence.
The kiwi slipped to 4.3207 yuan from 4.3263 yuan yesterday, after Chinese trade data showed imports and exports were worse than expected in January. The trade-weighted index gained to 72.22 from 72.15 yesterday.