NZ dollar edges up as market latches on to weak US job news
NZ dollar edges up as market latches on to weaker US employment data
May 2 (BusinessDesk) - The New Zealand dollar edged up as investors latched on to weaker than expected US employment data, after figures earlier this week showed soft economic growth in the first three months of the year.
The kiwi increased to 86.36 US cents at 8am in Wellington from 86.13 cents yesterday. The trade-weighted index advanced to 80.27 from 80.01.
Markets largely ignored positive consumer spending and manufacturing news in the world’s biggest economy, focusing instead on an unexpected rise in initial jobless claims ahead of April’s non-farm payrolls report on Friday in Washington. Tepid first-quarter growth in the US sparked concerns about the strength of its economy, though forward-looking indicators still show signs of life.
“There’s a small bias towards responding to negative news,” said Imre Speizer, market strategist at Westpac Banking Corp. “That will overall keep the US dollar weak and push up the kiwi/US.”
Westpac’s Speizer said the kiwi may trade between 86 US cents and 86.40 cents today ahead of the US payrolls report.
A number of European markets were closed for the May Day holiday yesterday, keeping trading volumes light.
Traders will keep an eye on the ANZ commodity price index today for a read on New Zealand’s export market, and after prices have been drifting down in recent months.
The kiwi rose to 88.34 yen at 8am in Wellington from 88.06 yen yesterday, and climbed to 93.09 Australian cents from 92.67 cents. It increased to 62.29 euro cents from 62.07 cents, and edged up to 51.11 British pence from 51.02 pence.