NZ dollar may fall as US data stokes demand for greenback
NZ dollar may fall as US data buoys optimism about world's largest economy
By Tina Morrison
July 7 (BusinessDesk) - The New Zealand dollar was little changed in quiet trading following Friday's Independence Day holiday in the US, although it may soften following stronger US economic data last week.
The kiwi was at 87.44 US cents at 8am in Wellington, from 87.38 cents at the New York close and 87.49 cents at 5pm on Friday. The trade-weighted index was virtually unchanged at 81.42 from 81.43 on Friday.
The US dollar index, which measures the greenback against a basket of currencies, strengthened after a report on Thursday showing a fifth month of solid US jobs numbers lifted optimism about a revival in the world's largest economy and turned attention to when the Federal Reserve will start raising interest rates.
"It will be interesting to see if we can't continue the theme of a stronger US dollar after the payrolls and the unemployment number last Thursday," said Martin Rudings, OMF senior dealer, foreign exchange. "That should resonate through the market and maybe unlock the door for US interest rates to go a little bit higher now. It really is confirming that the labour market is growing in the States and the market can take a bit of confidence from that."
The report should "put a lid" on a rising kiwi dollar, which could test a low of 86.40 US cents this week, Rudings said.
In New Zealand today, Quotable Value will publish its latest monthly report on property valuations at midday.
The New Zealand dollar edged lower to 93.33 Australian cents from 93.43 cents on Friday, was little changed at 64.32 euro cents from 64.28 cents, unchanged at 50.95 British pence and slipped to 89.20 yen from 89.27 yen.