NZ dollar gains vs. A$ as unemployment falls; US jobs data looms
By Paul McBeth
Feb. 5 (BusinessDesk) - The New Zealand dollar recovered ground against its trans-Tasman counterpart after falling
unemployment firmed up expectations for a rate hike by the local central bank, after the Reserve Bank of Australia
yesterday scotched the chance of another cut.
The kiwi rose to 92.28 Australian cents at 5pm in Wellington from 91.46 cents yesterday. It traded at 82.01 US cents at
5pm from 82.16 cents yesterday, holding its gain from 80.94 cents yesterday.
New Zealand’s unemployment rate fell 0.2 of a percentage point to 6 percent in the December quarter, with jobs growth
more than twice the expected pace, spurred by gains in retail and hospitality. That’s the last piece of major data
before Reserve Bank governor Graeme Wheeler reviews monetary policy in March, when he’s widely expected to embark on a
tightening cycle of higher interest rates.
The kiwi dollar tumbled against its Australian counterpart yesterday when the RBA dropped its reference for further
policy adjustments, instead saying rates will remain stable for some time, reducing the potential gap between
trans-Tasman interest rates. The RBA will release its updated forecasts on Friday.
“The kiwi/Aussie bounced back on the jobs data, which was on expectations, no more, no less,” said Tim Kelleher, head of
institutional FX sales NZ at ASB Institutional in Auckland. “The kiwi/Aussie came off a bit after the RBA came out and
said things weren’t quite as bad.”
New Zealand markets are closed for the Waitangi Day holiday tomorrow, and ASB’s Kelleher said the kiwi will probably go
sideways, trading between 81.50 US cents and 82.50 cents, ahead of US employment figures on Friday in Washington.
US private payrolls figures, seen as a pre-cursor for the official data, are scheduled for release on Wednesday in
Washington.
The local currency climbed to 83.21 yen at 5pm from 81.91 yen yesterday, and gained to 60.68 euro cents from 59.91
cents. It advanced to 50.23 British pence from 49.66 pence. The trade-weighted index increased to 77.53 from 76.58.
(BusinessDesk)