NZ dollar gains ahead of figures that may show jobless rate falling
Aug. 9 (BusinessDesk) - The New Zealand dollar rose against the greenback and the euro before government figures expected to show the jobless rate fell in the second quarter, underlining the nation’s relatively resilient economic performance.
The kiwi dollar gained to 81.49 US cents from 81.19 cents at 5pm in Wellington yesterday. The trade-weighted index slipped to 72.98 from 73.21.
The jobless rate fell to 6.5 percent in the second quarter from 6.7 percent three months earlier, according to a Reuters survey. The household labour force survey will be followed by the ANZ Roy Morgan consumer confidence survey. This afternoon, Australia releases its employment figures, providing further evidence of the pace of New Zealand’s biggest export market.
“Should today’s run of data prove about as positive as we expect, the NZD/USD should continue to draw support from a high and rising NZ-US interest rate differential,” said Mike Jones, strategist at Bank of New Zealand.
New Zealand’s official cash rate of 2.5 percent compares to a benchmark rate near zero in the US. The gap between the yield on New Zealand 10-year government bonds and comparable 10-year US Treasuries is currently at around 203 basis points.
The Australian jobs figures will help the market judge the Reserve Bank of Australia’s view this week that growth is close to trend and a cash rate of 3.5 percent continues to be appropriate. Governor Glenn Stevens also said growth in China, Australia’s biggest market, has slowed to a sustainable level.
BNZ’s Jones said investors are also awaiting data from China including inflation, producer prices, retail sales and industrial production.
The kiwi dollar traded at 77.07 Australian cents from 77.01 cents yesterday and was little changed at 52.03 British pence. It climbed to 65.91 euro cents from 65.55 cents and gained to 63.94 Japanese yen from 63.77 yen.