* Kiwi bolstered by risk appetite, upbeat RBNZ view
* Euro firms ahead of European Central Bank policy statement
* Strong resistance to more euro gains seen around $1.08
By Patrick Graham
LONDON, Dec 8 New Zealand's dollar was the
biggest gainer among major currencies on Thursday, rising 0.7
percent after a speech by Reserve Bank Governor Graeme Wheeler
added to speculation the bank would raise interest rates next
With all eyes fixed on a European Central Bank meeting
widely expected to extend its programme of quantitative easing,
the euro was around a quarter of a percent higher against the
dollar. The yen and other major pairs were broadly flat.
New Zealand has consistently run higher interest rates than
its developed world peers since the 2008 financial crisis, and
Wheeler confirmed the bank's most recent guidance that rates
were unlikely to go lower than the current 1.75 percent.
But he also pointed to the beginnings of a turn higher in
global inflation expectations that might end the ultra-
easy settings in other major
economies and relieve upward pressure on the kiwi.
Conversely, that was read as removing one barrier to higher
domestic rates next year that would support the kiwi.
"Wheeler struck an upbeat tone on inflation and growth and
pointed to the global factors that have been keeping the NZD
overvalued abating," analysts from Credit Agricole said in a
morning note. "The market increased the chances of a rate hike
in 2017 to almost 80 percent."
The kiwi rose 0.7 percent to $0.7212.
The euro made steady gains on Wednesday and it rose another
0.2 percent in early deals in Europe to trade just half a cent
off a three-week high against the dollar.
While a stronger greenback has been the big consensus since
Donald Trump's election a month ago, some senior bank analysts
have begun to question the durability of the rally going into
the holiday season.
However, a number of traders and investors said $1.08-$1.09
looked like strong resistance levels to further gains for the
"I think there is risk for a stronger euro if they deliver a
message that is in line with expectations," said Alessio de
Longis, a portfolio manager and macro strategist with
Oppenheimer Funds in New York.
"But in our view euro rallies ought to be sold. We are still
in our camp of pushing the euro lower into the new year. If we
are right on the dollar's strength next year then it should
(Editing by Larry King)