NZ dollar little changed after RBA lifts growth forecast, US jobs data looms
By Paul McBeth
Feb. 7 (BusinessDesk) - The New Zealand dollar was little changed after the Reserve Bank of Australia lifted its growth forecast having dropped its easing bias this week, and ahead of US employment figures.
The kiwi traded at 82.26 US cents at 5pm in Wellington from 82.68 cents at 8am and 82.38 cents yesterday. The trade-weighted index was 77.61 from 77.54 yesterday.
The RBA raised its forecast for growth and inflation this year having this week removed the chance of another rate cut as the Australian economy shows more lift in it than previously thought. The Australasian currencies had already found support from a lift in investors’ appetite for risk-sensitive assets as fears over emerging markets subsided.
The New Zealand dollar was little changed at 91.95 Australian cents from 91.87 cents yesterday, and is heading for a 0.4 percent weekly decline from 92.32 cents last week. Four of eight traders and strategists surveyed on Monday predicted it would decline this week, one picked a gain, and three expected it to remain stable.
Traders are looking ahead to US non-farm payrolls on Friday in Washington, overnight local time, which are expected to show 180,000 jobs were added to the world’s biggest economy in January after bitter December weather sapped employment growth. US employment is seen as a key plank in the Federal Reserve’s plans to slow down its monetary stimulus.
“Higher employment in the US should open the door for US interest rates to go higher and support the US dollar,” said Martin Rudings, senior adviser at OMF in Wellington. “the kiwi and the Aussie should come off, but not as bad as emerging markets.”
The kiwi is heading for a 1.7 percent gain against the greenback this week from 80.85 cents at the close of trading in New York last week. A BusinessDesk survey on Monday of nine traders and strategists predicted it would trade between 77 US cents and 82.80 cents this week. Four expected it to advance, two expected a decline, and three said it would remain largely unchanged.
The local currency fell to 60.54 euro cents from 60.90 cents yesterday, after the European Central Bank yesterday kept its benchmark interest rate unchanged and the bank’s president Mario Draghi said there is no euro zone deflation problem.
The kiwi edged down to 50.40 British pence from 50.51 pence yesterday after the Bank of England kept rates on hold. The New Zealand dollar gained to 83.89 yen from 83.59 yen yesterday.