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


NZ dollar falls as data show zero U.S. job growth in August

NZ dollar falls as data show zero U.S. job growth in August

By Jason Krupp

Sept. 5 (BusinessDesk) - The New Zealand dollar fell two-thirds of a cent against the greenback after the key August non-farm payrolls report showed the U.S. economy added no new jobs in the month, prompting investors to abandon risk-sensitive assets in favour of gold and government bonds.

The New Zealand dollar recently traded at 84.36 U.S. cents, down from 85.03 cents on Friday in New York, and fell to 72.67 on the trade-weighted index of major trading partners' currencies from 72.89 previously.

The nervous mood on global equity markets ahead of the non-farm payroll report shifted into full risk-off mode on Friday after the U.S. employment data showed no new jobs were created in the month, well short of the 60,000 expected by a Bloomberg poll of economists. The number was skewed by 45,000 Verizon strikers who were not counted, though that wasn't enough to detract from the headline number, with the Standard & Poor's 500 Index closing 2.5% lower at 1,173.97, and Europe's Stoxx 600 Index falling 3% to 231.88.

The negative mood saw risk-sensitive currencies, such as the kiwi and Australian dollars, fall as investors fled for so-called safe haven assets. Yields on U.S. 10 year Treasury Bills fell to a historic low of 1.99% from 2.13% last week, while gold rose to US$1883.80 an ounce, up from US$1851.97 on Friday in New York.

"It was a rough close to last week for global markets and hence the New Zealand dollar," said Alex Sinton, a senior dealer at ANZ New Zealand. "The cap on the New Zealand dollar should continue to be lowered in the early part of this week given the developments on the US employment front."

On the crosses, the kiwi recently traded at 79.49 Australian cents, up from 79.38 cents on Friday, and fell to 64.85 Japanese yen from 65.33 yen previously. It fell to 59.60 euro cents from 59.68 cents last week, and dropped to 52.15 pence from 52.44 pence previously.

Fears over Europe's sovereign debt crisis reemerged with Italian Economy and Finance Minister Giulio Tremoti reaffirming his country's commitment to delivering on the recently passed austerity package, after the Europe Central Bank stepped up pressure for action by the struggling centre-right government.

Sinton said the kiwi may trade between a range of 84.24 U.S. cents and 85.07 cents, with the bias to the downside.


© Scoop Media

Business Headlines | Sci-Tech Headlines


Stats NZ: Primary Products Push Exports To A New High

New Zealand exports reached a new high in June 2021, off the back of record export values for logs and beef, Stats NZ said today. In June 2021, the value of all goods exports rose... More>>

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>>

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>>