Celebrating 25 Years of Scoop
Special: Up To 25% Off Scoop Pro Learn More

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


Kiwi gains ahead of US employment, Spanish update

New Zealand dollar gains ahead of US employment, Spanish update on finances

By Paul McBeth

Aug 03 (BusinessDesk) - The New Zealand dollar gained in local trading ahead of US jobs figures which will likely show the unemployment rate is unchanged in the world's biggest economy, and as Spain's government prepares to make a public announcement on how it's faring.

The kiwi rose to 81.29 US cents at 5pm from 80.88 cents at 8am and 80.91 cents yesterday. The trade-weighted index advanced to 73.44 from 73. The New Zealand dollar is poised for a 0.6 percent weekly gain against the greenback and a 1.4 percent increase on a trade-weighted basis.

The US added 100,000 jobs last month though its unemployment rate stayed at 8.2 percent, according to a Bloomberg survey of economists. Traders are looking to see whether the figures are in line with expectations, or if the US labour market remains weak, increasing the chance of more asset purchases by the Federal Reserve.

"If it confirms another soft payrolls figure, that raises the risk the Fed has to do more," said Joe Carpuso, currency strategist at Commonwealth Bank of Australia in Sydney. "That would mean the Aussie would lift and would be supportive for commodity prices" which would stoke demand for the kiwi, he said.

Traders will look to Spanish Prime Minister Mariano Rajoy's press conference after a Cabinet meeting to provide an update on the Mediterranean nation's parlous finances.

"This could be the time when Spain puts up its hand and says 'we need some assistance here'," he said. "If that were to happen, it would be a big event for the market."

Advertisement - scroll to continue reading

Are you getting our free newsletter?

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.

The kiwi dollar got a small boost from Standard & Poor's reaffirming New Zealand's AA credit rating, saying the government's strong fiscal position is offsetting the nation's high level of external debt.

Moody's Investors Service and S&P have been downgrading nations and banks recently, though it would take something major for them to get pessimistic about this part of the world, Capurso said.

Investors were put on edge in Northern Hemisphere trading after the European Central Bank failed to deliver any immediate package to shore up the region's debt crisis. That followed on from the Fed meeting a day earlier, which didn't offer any more clues on whether the central bank will print more money.

The New Zealand dollar climbed to 66.76 euro cents from 66.02 cents at 5pm yesterday, and gained to 52.39 British pence from 52.05 pence yesterday. It increased to 77.59 Australian cents from 77.14 cents yesterday, and was little changed at 63.56 yen from 63.48 yen.


© Scoop Media

Advertisement - scroll to continue reading
Business Headlines | Sci-Tech Headlines


Join Our Free Newsletter

Subscribe to Scoop’s 'The Catch Up' our free weekly newsletter sent to your inbox every Monday with stories from across our network.