NZ dollar edges down from three-week high
NZ dollar edges down from three-week high as investors mull US jobs report
By Paul McBeth
May 5 (BusinessDesk) - The New Zealand dollar slipped from a three-week high as investors mulled US employment data which showed weak wage growth, even as the world’s biggest economy added more jobs than expected last month.
The kiwi fell to 86.57 US cents at 5pm in Wellington from as high as 86.82 cents earlier in the day. It was down from 86.71 cents at 8am and 86.66 cents on Friday in New York. The trade-weighted index edged down to 80.42 at 5pm in Wellington 80.55 last week.
The local currency’s strength eased in the Asian session as investors weighed up US non-farm payrolls, which showed better-than-expected jobs growth of 288,000 in April. The pick-up in employment was tempered by a declining participation rate and flat wages.
“People were hoping for a good non-farm payrolls number, and when we got it, we saw US dollar strength before the rest of the data came out,” said Alex Hill, head of dealing at HiFX in Auckland. “When the US dollar decides to appreciate, it will happen quickly, but employment wasn’t enough to do that for us on Saturday.”
HiFX’s Hill said the local currency is stuck in a range of between 85 US cents and 87 cents, with domestic data likely to weigh on the kiwi.
A BusinessDesk survey of 10 traders and strategists predict the kiwi may trade between 84.80 US cents and 88.40 cents this week. Six predict the kiwi will fall this week, two expect it to gain and two pick it to remain largely unchanged.
Japan’s yen strengthened after Bank of Japan governor Haruhiko Karoda told CNBC the nation’s economic recovery is on track, sapping expectations the central bank will add more stimulus to the world’s third-biggest economy. The kiwi fell to 88.20 yen at 5pm in Wellington from 88.58 yen on Friday in New York.
The local currency slipped to 93.40 Australian cents from 93.51 cents ahead of tomorrow’s Reserve Bank of Australia rate review, which will likely keep the target cash rate at 2.75 percent.
New Zealand’s currency traded at 62.37 euro cents at 5pm in Wellington from 62.47 cents last week, and was little changed at 51.30 British pence from 51.37 pence.