NZ dollar little changed as investors await RBA review, US jobs data
By Paul McBeth
March 31 (BusinessDesk) - The New Zealand dollar was little changed as investors await tomorrow’s Reserve Bank of
Australia policy review, and US employment figures later in the week for a steer on global growth prospects.
The kiwi was unchanged at 86.56 US cents at 5pm in Wellington from 8am, and little changed from 86.58 cents on Friday in
New York. The trade-weighted index slipped to 80.86 from 81.03 last week.
The RBA is expected to keep the target cash rate at 2.5 percent when it reviews monetary policy tomorrow, and traders
will focus on whether governor Glenn Stevens tries to talk down the Australian dollar in his commentary after omitting
to do so in a recent speech in Hong Kong. The kiwi declined to 93.74 Australian cents from 93.92 cents on Friday in New
York
The RBA review precedes US employment data culminating in the Federal government’s non-farm payrolls report on Friday.
An improving labour market is seen as a bellwether for the US Federal Reserve to move away from its ultra-loose monetary
policy.
“The Aussie stuff tomorrow and the US jobs data mid-week is the focus,” said Alex Hill, head of dealing at HiFX in
Auckland. “One of the worst-kept theories is that the US dollar is due to strengthen after the employment numbers,”
which should weaken the kiwi, he said.
The New Zealand dollar has been a favourite among traders due to the country’s strong growth prospects and the Reserve
Bank’s move to higher interest rates. Economic figures today reinforced that, with strong business and employment
confidence surveys, and government data showing building permits for new housing still growing. The local currency is
heading for a 5 percent gain against the greenback this quarter.
The kiwi dollar held near a six-and-a-half year high against the yen as figures showed Japanese industrial production
unexpected fell in February in its sharpest decline for eight months. The kiwi traded at 89.04 yen at 5pm in Wellington
from 89.20 on Friday in New York, the highest level since July 2007.
HiFX’s Hill said the yen is at some key technical levels against the greenback, and could weaken further if those levels
break. It traded at 102.87 per US dollar from 102.97x last week.
The kiwi fell to 62.95 euro cents from 63.43 cents on Friday in New York, and declined to 52.04 British pence from 52.36
pence.
(BusinessDesk)