Overnight the New Zealand Dollar dropped to a multi-week low against its Australian counterpart as the ‘Aussie’ was boosted by the news that the Reserve Bank of Australia is now comfortable with the currency’s exchange rate.
The ‘Kiwi’ was also struggling against the US Dollar as yesterday’s disappointing US manufacturing report lessened investor’s appetite for risk.
However, the South Pacific currency advanced on the Euro during European trading as investors dwelt on the prospect of the European Central Bank introducing additional stimulus on Thursday.
Although yesterday’s manufacturing PMI reports for the Eurozone indicated that the currency bloc’s recovery continued as 2014 got underway, last week’s inflation data continues to weigh on the common currency and the Eurozone’s economic outlook.
The New Zealand Dollar was also supported against the Euro by the expectation that today’s employment figures for New Zealand will show that the nation’s unemployment rate declined from 6.2 per cent to 6.0 per cent in the fourth quarter of 2014, the lowest level since 2009.
If accurate, the result would add to the case for the Reserve Bank of New Zealand increasing interest rates in the very near future.
In other currency news, the Pound gained on the New Zealand Dollar and strengthened against the majority of its other most traded counterparts as a gauge of UK construction surged.
The increase in the pace of UK construction output was the most rapid for five and a half years and prompted this response from industry expert Neil Jones; ‘The number was a pleasant and positive surprise. The data beat the survey, beat my expectations and even beat the December reading. The Pound got a boost in a bearish market.’
New Zealand’s employment figures are scheduled for release at 21:45 GMT.
Tomorrow’s services PMI and retail sales reports for the Eurozone could trigger additional movement in the EUR/NZD pairing.
Euro (EUR) Exchange Rates
[table width=”100%” colwidth=”50|50|50|50|50″ colalign=”left|left|left|left|left”]
Currency, ,Currency,Rate ,
Euro,,US Dollar,1.3518 ,
Euro,,British Pound,0.8273 ,
Euro,,Australian Dollar,1.5188 ,
Euro,,New Zealand Dollar,1.6590 ,
Euro,,Canadian Dollar,1.5006 ,