FOREX-Euro pressured ahead of ECB, kiwi skids on RBNZ rate cut

Wed Mar 9, 2016 11:11pm EST
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* RBNZ surprises with interest rate cut, signals more easing

* Euro pressured amid expectations of further ECB easing steps

* Dollar gains vs JPY after China CPI beats expectations

By Lisa Twaronite

TOKYO, March 10 (Reuters) - The euro came under bearish pressure in Asian trade on Thursday ahead of a European Central Bank meeting that is expected to result in further easing steps, while the kiwi skidded after the Reserve Bank of New Zealand surprised with an interest rate cut.

The New Zealand dollar nursed losses after tumbling more than a cent after the RBNZ's decision to cut its official cash rate by 25 basis points to 2.25 percent, citing a material decline in a range of inflation expectation measures. The central bank also signalled at least one more rate cut to come.

The New Zealand currency was last down 0.3 percent at $0.6635 after dipping to a one-week low of $0.6618, well below its overnight high of $0.6809.

The ECB is expected to cut the deposit rate by 10 basis points to -0.40 percent, announce more asset purchases and possibly introduce tiered interest rates like the Bank of Japan in a bid to boost inflation, according to a Reuters poll published on Monday.

"This is probably not a consensus view, but the market is almost pricing in the entire kitchen sink from the ECB, and I think it's setting itself up for disappointment," said Jennifer Vail, head of fixed-income research at U.S. Bank Wealth Management in Portland, Oregon.   Continued...