NZ dollar hovering around 68 US cents

NZ dollar hovering around 68 US cents after US jobs data, eyes on Brexit

By Rebecca Howard

March 11 (BusinessDesk) - The New Zealand dollar continues to hover around 68 US cents after rallying on disappointing US jobs data.

The kiwi traded at 67.99 at 8am in Wellington versus 68.02 late Friday in New York. It was at 67.58 at 5pm Friday in Wellington ahead of the US data. The trade weighted index was at 73.97 from 73.98 late Friday in New York.

US nonfarm payrolls added 20,000 jobs in February, well below the consensus expectation of 180,000. However, the unemployment rate dropped to 3.8 percent in February and wages grew at the fastest pace in nearly a decade.

"The unexpected weakness in non-farm payrolls will have sparked much debate. The data is prone to large revisions, and other labour market indicators remain strong. Nonetheless, it is plausible that the more mixed US data in recent months could be starting to flow through into labour demand," says ANZ FX/rates strategist Sandeep Parekh.

He said the US, like New Zealand and Australia, is in a situation where some sector data is soft, but the broader outlook still uncertain and labour markets outright strong. "The three central banks are in neutral as a result, but rates markets are starting to gun for cuts - though only slightly in the US, given the last hike was just three months ago."

While the kiwi lifted after the US data "it remains at the whim of market sentiment and US dollar moves," says Parekh.

The kiwi traded at 52.31 British pence from 52.19 late Friday in New York and "all eyes on sterling as Brexit vote looms," says Parekh. MPs are due to pass their verdict Tuesday on Prime Minister Theresa May's latest plan to take Britain out of the European Union on March 29.

"Concerns over the vote will no doubt mean plenty of sweaty palms this week," says Parekh.

The kiwi was trading at 60.47 euro cents from 60.46. It was at 75.54 yen from 75.51 and at 4.5690 Chinese yuan from 4.5663. It was at at 96.52 Australian cents from 96.45.

(BusinessDesk)

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