NZ dollar holds gains after weak Australian jobs data, Obama speech looms
By Paul McBeth
Sept. 8 (BusinessDesk) – The New Zealand dollar held gains in today’s trading session, shrugging off weak Australian employment data, as investors prepare for U.S. President Barack Obama’s speech on boosting jobs.
The kiwi dollar rose to 83.27 U.S. cents at 5pm from 82.99 cents at 8am and was up from 82.86 cents yesterday.
Australia’s unemployment rate unexpectedly rose to 5.3% in August from 5.1% previously, eroding appetite for the Australian dollar after yesterday’s bigger than expected economic growth. The kiwi dollar bounced back from a two-month low against its Australian counterpart, shrugging off local construction data that showed the volume of work put in place in the three months ended June 30 sank to a 10-year low.
The kiwi dollar rose to 78.58 Australian cents from 78.03 cents yesterday.
“Currency market are learning to differentiate the two (currencies)” with the trans-Tasman dollars going in different directions today and yesterday, said Khoon Goh, head of market economics and strategy at ANZ New Zealand.
That comes ahead of U.S. President Obama’s address to Congress, where he is expected to unveil a US$300 billion package to stoke employment in the world’s biggest economy.
The European Central Bank and Bank of England are scheduled to meet in the Northern Hemisphere session, with both unlikely to add any stimulus.
Europe’s burgeoning sovereign debt crisis and the prospect of the U.S. falling into another recession have kept investors on tenterhooks and sparked buying of so-called safe haven assets such as government bonds and gold.
Goh said central banks are all focusing on the global situation, and that will likely keep the Reserve Bank of New Zealand on hold when Governor Alan Bollard announces his monetary policy statement next week.
“The kiwi is not really in focus at the moment, but it will be next week when the MPS comes around,” he said.
The kiwi dollar rose to 64.41 yen from 63.86 yen in yesterday and gained to 59.17 euro cents from 58.84 cents. It rose to 71.99 on the trade-weighted index from 71.48 yesterday, and advanced to 52.18 pence from 51.75 pence yesterday.