NZ dollar slips as key US jobs report tipped to beat expectations
By Tina Morrison
Jan. 10 (BusinessDesk) – The New Zealand dollar slipped ahead of a key US employment report later today which analysts
are tipping to be better than expected, bolstering expectations the Federal Reserve will continue to pull back its
monetary stimulus this year.
The kiwi weakened to 82.43 US cents at 8am in Wellington from 82.57 cents at 5pm yesterday. The trade-weighted index
dropped to 78.16 from 78.30 yesterday.
Investors are awaiting non-farm payrolls employment figures in the US today, buoyed by better than expected jobs figures
in this week’s ADP Research Institute report. Confirmation that employment is picking up in the world’s largest economy
will likely cement expectations that the Fed will continue to reduce its monetary stimulus, after cutting the monthly
bond buying programme by US$10 billion this month to US$75 billion.
“Today’s focus is on US non-farm payrolls with ANZ expecting an above consensus number,” ANZ Bank New Zealand strategist
Carrick Lucas and senior FX strategist Sam Tuck said in a note. “Should this occur, NZD/USD could remain under downside
pressure.”
ANZ expects the kiwi to trade between 82.10 US cents and 82.80 cents today.
Analysts are expecting the US non-farm payrolls data to show 196,000 jobs were created in December, according to Reuters
polls. ANZ expects 205,000 new jobs with the unemployment rate to tick up to 7.1 percent from 7 percent due to a modest
lift in the participation rate.
Traders will also be eyeing Chinese trade figures this afternoon for clues as to how Asia’s largest economy is tracking,
ANZ said.
The New Zealand dollar slipped to 60.68 euro cents at 8am from 60.79 cents yesterday having climbed as high as 60.98
cents earlier this morning after European Central Bank president Mario Draghi left interest rates at record lows and
suggested there may be downside risks to inflation
The local currency dropped to 50.08 British pence from 50.17 pence yesterday, touching a high of 50.27 pence overnight
after the Bank of England kept its key policy settings unchanged following its monthly meeting.
The kiwi fell to 86.37 yen from 86.55 yen yesterday and weakened to 92.75 Australian cents from 92.90 cents ahead of
data on new home sales today.
(BusinessDesk)