NZ dollar holds above 80 cents ahead of US employment data

NZ dollar holds above 80 cents ahead of US employment data

By Hannah Lynch

July 6 (BusinessDesk) - The New Zealand dollar held near its recent two-month high in local trading ahead of US employment figures which are likely to show world's largest economy remains on track.

The New Zealand dollar traded at 80.15 US cents at 5pm, little changed from 80.21 cents yesterday at 5pm and down from 80.35 cents at 8am. The trade weighted index increased to 72.70 from 72.52 yesterday.

Investors will be eyeing the US for further evidence of a recovery when June's non-farm payrolls are released on Friday. Economists polled by Reuters forecast an increase 90,000 jobs and the US unemployment rate holding steady at 8.2 percent.

"The worst thing for the kiwi dollar would be if we had a marginal miss," said Chris Weston, market strategist at IG Markets. "That would mean the kiwi falls."

"Every other scenario would see the kiwi rally," he said.

Ahead of the monthly employment data, reports on Thursday showed the number of Americans applying for the dole dropped by 14,000 in the week ended June 30 to 374,000, while private employers increased payrolls by 176,000 last month, according to ADP Employer Services data.

The New Zealand dollar rose to 64.73 euro cents from 64.01 yesterday after central banks in Europe, England and China eased borrowing costs on concerns about the global outlook.

The European Central Bank cut its key interest rate by 25 basis points to a record-low 0.75 percent, while the Bank of England raised its asset-purchase target by 50 billion pounds to 375 billion pounds. China unexpectedly cut its key interest rate for the second time in a month.

The New Zealand government's financials released this morning showed the Crown took in $50.54 billion in tax in the 11 months ended May 31, beating the Treasury’s forecast $49.87 billion.

New Zealand data set for release next week includes electronic card transactions, the accommodation survey and the food price index from Statistics New Zealand. The ANZ-Roy Morgan Consumer Confidence and Bank of New Zealand - Business NZ Performance Manufacturing Index are due out on Thursday.

The New Zealand dollar was largely unchanged on 78.16 Australian cents from 78.20 yesterday at 5pm. It was little changed on 64 yen from 64.02 yen. The kiwi climbed to 51.58 British pence from 51.43 pence.

(BusinessDesk)

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