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

 

NZ dollar falls ahead of jobs data, as growth fears weigh

NZ dollar falls ahead of employment data, amid global growth fears

By Jason Krupp

Aug. 4 (BusinessDesk) - The New Zealand dollar fell against the greenback
ahead of the release of the household labour force survey for the second quarter, with global growth fears continuing to keep markets firmly in risk off mode.

A spate of weaker service sector data from Asia, Europe and the U.S. saw investors' appetite for higher yielding or riskier assets continue to decline, further denting already bruised global equity and commodity markets. In Europe, the Stoxx 600 Index fell 2% to 251.95, and the 19-commodity Thompson Reuters Jefferies CRB index fell 1.3% to 337.32, its lowest level in a month.

"Equities are pretty fragile and still under pressure, so people who are invested in the market are having to rebalance their hedges to reflect the intra-month magnitude moves in the indices," said Alex Sinton, a senior dealer at ANZ New Zealand. "In this environment we're seeing people selling kiwi, although the currency still remains elevated against the euro, pound and Aussie dollar."

The move lower in the kiwi came ahead of today's household labour force survey for the second quarter, with markets expecting the unemployment rate to remain unchanged at 6.6%. The participation rate may fall to 68.4% in the three month period from 68.7% previously, according to a Reuters survey, as more people return to work but fail to find work.

"This is an erratic release so any positive surprise will see the New Zealand dollar spike but this should be met with appropriate levels of selling," Sinton said. "Equity markets still hold the key and have further downside potential."

The kiwi recently traded at 86.20 U.S. cents, down from 86.38 cents yesterday, and fell to 73.80 on the trade-weighted index of major trading partners’ currencies from 74.12. It was little changed at 80.18 Australian cents from 80.22 cents yesterday, and fell to 66.30 yen from 66.65 yen. It declined to 60.20 euro cents from 66.65 cents yesterday, and dropped to 52.47 pence from 52.97 pence previously.

The high level of the kiwi may now be in the Reserve Bank's cross hairs, according to Imre Speizer, market strategist at Westpac Banking Corp., with
conditions now more conducive to intervention in the currency than they were a week ago since selling would meet with less resistance due to the deterioration in global risk sentiment.

The kiwi may trade between a range of 85.82 U.S. cents and 86.62 cents, Sinton said, with the bias towards further correction.

(BusinessDesk)

© Scoop Media

 
 
 
Business Headlines | Sci-Tech Headlines

 




Energy: New Zealand Could Be World’s First Large-scale Producer Of Green Hydrogen

Contact Energy and Meridian Energy are seeking registrations of interest to develop the world’s largest green hydrogen plant. The plant has the potential to earn hundreds of millions in export revenue and help decarbonise economies both here and overseas... More>>


MBIE: 36th America’s Cup Post-event Reports Released

Post-event reporting on the 36th America’s Cup (AC36) has been released today. The reports cover the delivery of the event by Crown, Council and America’s Cup Event Limited, economic impacts for Auckland and New Zealand, and delivery of critical infrastructure... More>>

Fonterra: Farmer Feedback Set To Shape Revised Capital Structure Proposal

With the first phase of Fonterra’s capital structure consultation now complete, the Co-op is drawing up a revised proposal that aims to reflect farmers’ views. A number of changes are being considered to the preferred option initially put forward in the Consultation Booklet in May... More>>




Statistics: Household Saving Falls In The March 2021 Quarter

Saving by New Zealanders in the March 2021 quarter fell to its lowest level in two years after rising sharply in 2020, Stats NZ said today. Increases in household spending outpaced income growth, leading to a decline in household saving from the elevated levels that prevailed throughout 2020... More>>

ALSO: