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NZ dollar reaches almost 2-week high vs. Aussie on jobs data

NZ dollar jumps to almost 2-week high vs. Aussie after weak jobs data

By Jonathan Underhill

Feb. 13 (BusinessDesk) - The New Zealand dollar rose to the highest in almost two weeks against the Australian dollar after figures showed Australia’s jobless rate climbed to a 10-year high last month and that economy shed jobs.

In New Zealand dollar jumped to 92.91 Australian cents from 92.03 Australian cents at the start of the day. It fell to 83.11 US cents from 83.15 US cents at 8 am and from 83.46 cents yesterday.

Australian government figures showed the unemployment rate climbed to 6 percent last month, beating economist forecasts for a 5.9 percent rate, from 5.8 percent a month earlier. People employed fell by 3,700. The Australian dollar was broadly weaker after the date was released as traders rethought the timing of any interest rate moves by the central bank, which last week dropped reference to an easing bias.

“The employment data has certainly taken the gloss off the Australian dollar,” said Stuart Ive, senior adviser at OM Financial.

While traders expect the Reserve Bank of New Zealand to starting hiking its 2.5 percent official cash rate starting in March, they are divided on the timing of a move by the RBA and pared back best on a rate hike for its 2.5 percent cash rate after today’s figures. That makes the outlook for New Zealand rates relatively more attractive than for Australia and polishes the appeal of the kiwi.

Ive said traders are now looking ahead to retail sales in the US overnight for clues to the pace of growth in the world’s largest economy. Federal Reserve chair Janet Yellen this week reiterated the fed’s position that its massive stimulus programme would be wound back at a measured pace given weakness in the US labour market. Yellen is set to deliver the Fed's report to the Senate tonight.

The kiwi traded at 50.01 British pence from 50.11 pence at 8am in Wellington and 50.73 pence yesterday. The kiwi slipped to 61.01 euro cents from 61.23 cents yesterday and fell to 84.89 yen from 85.56 yen yesterday. The trade-weighted index was at 78.31 from 78.48 yesterday.

(BusinessDesk)

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