NZ dollar slips as US ADP jobs report aids greenback

NZ dollar slips as US ADP jobs report aids greenback; ECB, BOE loom

March 7 (BusinessDesk) – The New Zealand dollar fell back below 83 US cents after a US private sector jobs report came in stronger than expected, stoking speculation the Federal Reserve will curtail its money printing sooner than has been projected.

The kiwi dollar fell to 82.81 US cents from 83.29 cents at 5pm in Wellington yesterday. The trade-weighted index eased to 76.22 from 76.32.

US private employers added 198,000 jobs to their payrolls in February, according to the ADP National Employment Report, beating estimates and prompting some economists to lift their forecasts for non-farm payrolls data due on Friday. The Fed has linked its quantitative easing to weakness in US employment so signs of recovery are tending to underpin the greenback.

“The Fed has linked pumping money to their employment numbers,” said Stuart Ive, senior trader at HiFX. “So we saw a little bit of risk being taken off” and that weighed on the kiwi.

The New Zealand dollar may trade in a range of 82.70 US cents to 83.30 cents today, Ive said.

Traders are awaiting today’s announcement from the Bank of Japan though with the change of governor no major initiatives are expected.

The European Central Bank’s policy statement will come out tonight and Ive said while the ECB is unlikely to move rates, traders will be looking for comments about Italy’s election impasse. Italian concerns have eased somewhat, with that nation’s bond yields falling and comments from Spain’s government that contagion isn’t as much of a threat.

The kiwi traded little changed at 63.72 euro cents and edged up to 55.08 British pence from 55.01 pence. It fell to 80.92 Australian cents from 80.97 cents and rose to 77.85 yen from 77.59 cents.

(BusinessDesk)

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