Video | Agriculture | Confidence | Economy | Energy | Employment | Finance | Media | Property | RBNZ | Science | SOEs | Tax | Technology | Telecoms | Tourism | Transport | Search


NZ dollar slips as greenback lifts on labour data

NZ dollar slips as greenback lifts on labour data ahead of payrolls report

By Tina Morrison

Aug. 1 (BusinessDesk) - The New Zealand dollar weakened as US labour market data strengthened the greenback, bolstering optimism of an upbeat US non-farm payrolls report today which may reinforce the case for the Federal Reserve to hike rates sooner than pexpected.

The kiwi slipped to 84.93 US cents at 8am in Wellington, from 85.03 cents at 5pm yesterday. The trade-weighted index edged lower to 79.67 from 79.71 yesterday.

The US dollar index, which measures the greenback against a basket of currencies, held at its highest level in more than 10 months as a measure of US labour costs monitored by the Fed had its biggest jump in more than five years while the four-week average of jobless claims fell to its lowest since 2006. The labour market data follows better than expected US second quarter GDP this week and is reinforcing optimism for strength in the US non farm payrolls report tonight.

"There's scope for further US dollar strength," said OMF senior foreign exchange dealer Martin Rudings. "For the remainder of the year, the US economy is going to continue to recover quite strongly. That's just going to help support the dollar. Maybe at some point this year, the Fed will come clean with an earlier Fed rate hike than what they are trying to say at the moment. All that will add into a stronger dollar and the kiwi and Aussie will probably come off."

Trader reaction to the labour market data was muted as they await confirmation of the state of the US economy from the payrolls report tonight. Economists in a Reuters poll expect the data to show the US added 233,000 jobs in July. Should the data beat expectations, the kiwi and Aussie "may come off quite hard", Rudings said.

During local trading today, the kiwi will probably drift down towards 84.60 US cents, Rudings said.

The New Zealand dollar rose to 91.39 Australian cents from 91.24 cents yesterday ahead of Chinese manufacturing PMI data for due for release this afternoon. China is Australia's largest trading partner. Australia also has July house price data and quarterly PPI.

"We are seeing some buyers of kiwi against the Aussie and that looks like there is some room to go up," OMF's Rudings said.

The kiwi edged lower to 63.43 euro cents from 63.48 cents yesterday. European inflation unexpectedly slowed to 0.4 percent in July from 0.5 percent in June. That's the lowest inflation rate since 2009 in an environment where the European Central Bank is increasing stimulus to fight against the threat of deflation.

The local currency advanced to 50.30 British pence from 50.24 pence yesterday and was little changed at 87.36 yen from 87.37 yen.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Welcome Home: Record High Migration Stokes 41-Year High Population Growth

New Zealand annual net migration hit a new high in October as more people arrived from than departed for Australia for the first time in more than 20 years. More>>


Citizens' Advice Bureau: Report Shows Desperate Housing Situation Throughout NZ

CAB's in-depth analysis of over 2000 client enquiries about emergency accommodation shows vulnerable families, pregnant women and children living in cars and garages, even after seeking assistance from the Ministry of Social Development and Housing New Zealand. More>>


Speaking For The Bees: Greens Call For Neonicotinoid Pesticide Ban

The National Government should ban the use of controversial pesticides called neonicotinoids after evidence has revealed that even at low doses they cause harm to bee populations, the Green Party said today. More>>


Science Awards: NZAS Celebrate NZ Scientific Achievements

The Marsden Medal is awarded for a lifetime of outstanding service to the cause or profession of science, in recognition of service rendered to the cause or profession of science in the widest connotation of the phrase. This year’s medal is awarded to Dr Mike Andrews. More>>


Court Rules: Affco 'Unlawfully' Locked Out Meat Workers

The note says the full court found for the plaintiffs, "that is that the defendant locked out the second plaintiffs unlawfully and that it breached s 32 of the Act by acting otherwise than in good faith towards the plaintiffs while collective bargaining was still going on." More>>


Get More From Scoop

Search Scoop  
Powered by Vodafone
NZ independent news