Friday 06 May 2016 08:39 AM
NZ dollar falls as greenback broadly strengthens ahead of US jobs report
By Tina Morrison
May 6 (BusinessDesk) - The New Zealand dollar fell as the greenback strengthened ahead of a key US jobs report, and
after upbeat comments from Federal Reserve officials.
The kiwi slid to 68.77 US cents at 8am in Wellington, from 69.02 cents at 5pm yesterday. The trade-weighted index was at
73.02 from 73.08 yesterday.
The US dollar index, which measures the greenback against a basket of currencies, advanced to a week-high after two Fed
officials, James Bullard and John Williams, offered upbeat comments on the US jobs market and suggested an interest rate
hike in June is not off the table. Today, the focus will turn to the US government's monthly jobs data which is expected
to show US companies added 200,000 workers to their payrolls in April, according to a Bloomberg poll.
"The market is awaiting the key release of the week, the US employment report," Bank of New Zealand senior market
strategist Kymberly Martin said in a note. "In order to maintain the rebound in the US dollar, a solid payrolls release
would likely need to be accompanied by stronger-than-expected average hourly earnings growth. This could prompt the
market into increasing its expectations for Fed rate hikes this year. Currently the market only prices around a 50
percent chance of one more Fed rate hike by year-end."
With no domestic data scheduled for today, the fate of the kiwi heading into the weekend lies with the release of the US
employment report, Martin said.
The kiwi has support at 68 US cents and faces resistance at 70.50 cents, she said.
The New Zealand dollar edged up to 92.15 Australian cents from 92.08 cents yesterday. The Reserve Bank of Australia
publishes its statement on monetary policy today.
The local currency gained to 60.29 euro cents from 60.10 cents yesterday. It slid to 47.48 British pence from 47.56
pence, declined to 73.74 yen from 73.92, and fell to 4.4723 yuan from 4.4863 yuan.
(BusinessDesk)
ends