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NZ dollar drops to four-month low as US jobs data

NZ dollar drops to four-month low as US jobs data, final election count loom

By Paul McBeth

Oct. 6 (BusinessDesk) - The New Zealand dollar hit a four-month as the greenback was bolstered by recent upbeat data ahead of tonight's US jobs report and as the final election tally looms on Saturday.

The kiwi fell as low as 70.10 US cents and traded at 71.13 cents as at 8am in Wellington from 71.53 cents yesterday. The trade-weighted index declined to 75.30 from 75.55 yesterday.

The US dollar index, a measure of the greenback against a basket of currencies, rose 0.5 percent after stronger than expected US trade and factory orders data bolstered investor sentiment and as San Francisco Federal Reserve president John Williams and Philadelphia Fed president Patrick Harker backed higher US interest rates in separate speeches. Investors will be watching the US non-farm payrolls report tonight which is expected to show the world's biggest economy added 90,000 jobs last month. Meanwhile, New Zealand's general election vote count will be finalised tomorrow, meaning political parties will be able to kick off formal negotiations to form a government.

"The NZD has broken through some key support levels, but the potential political headlines (as well as reaction to the final vote count) could throw things around a little next week," ANZ Bank New Zealand senior economist Philip Borkin said in a note. "We retain a mild downside bias though, with some of NZD’s erstwhile support factors beginning to wane."

The greenback was also buoyed by the release of minutes to last European Central Bank policy review showing caution about winding back its quantitative easing programme, and the ongoing tensions in Spain over Catalonia's push for independence. The kiwi traded at 60.77 euro cents from 60.84 cents yesterday.

The local currency rose to 54.24 British pence from 54.01 pence yesterday as UK Prime Minister Theresa May's future remains under a cloud at the Conservative Party conference.

The kiwi was little changed at 91.30 Australian cents from 91.37 cents yesterday and fell to 4.7332 Chinese yuan from 4.7591 yuan. It slipped to 80.28 yen from 80.64 yen yesterday.

(BusinessDesk)

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