NZ dollar rises to two-month high against the euro

By Paul McBeth

BusinessDesk·

8 Jan, 2018 08:51 PM2 mins to read

The New Zealand dollar rose to a two-month high against the euro.

The New Zealand dollar rose to a two-month high against the euro as investors remained upbeat at the start of 2018 while waiting for US corporate earnings figures.

The kiwi rose to 60 euro cents as at 8am in Wellington from 59.65 euro cents on Monday. It was little changed at US71.76c from US71.78c.

See live rates for the NZ-US $ below. Click for more information:

The euro slipped 0.6 per cent, shrugging off upbeat data showing positive European confidence, as investors remain optimistic about global growth in a low inflation environment at the start of the year.

Stocks on Wall Street edged up to new records overnight on optimism fourth- quarter earnings will support the outlook for the US economy, which showed strong enough growth last year to warrant a gradual increase in interest rates.

Investors anticipate the Federal Reserve will hike the federal funds rate three times this year.

"Risk sentiment still remains very strong amid strong global growth, continued modest inflation and low volatility," Bank of New Zealand interest rate strategist Nick Smyth said.

"The NZD has been supported by the strong global growth backdrop and high risk appetite this year."

BNZ's Smyth said market positioning may also be underpinning support for the kiwi dollar, with Commodity Futures Trading Commission figures showing a near- record level of speculative short positions in New Zealand dollar futures.

A short position is where an investor bets an asset will fall on the expectation they can sell it and buy it back at a lower price.

With no local data today of note, market sentiment will probably remain the main influence on the currency.