NZ dollar little changed vs greenback ahead of payrolls, dips vs pound

Friday 2nd December 2016

The New Zealand dollar was little changed against the greenback ahead of US non-farm payrolls tonight, with a hike from the Federal Reserve on Dec. 14 fully priced in, and it fell against the pound after comments from Britain's Brexit secretary.

The kiwi dollar traded at 70.72 US cents as at 8:30am in Wellington, from 70.81 cents late yesterday. The local currency fell to 56.22 British pence from 56.56 pence.

The US economy added 180,000 jobs last month, figures due on Friday in the US are expected to show, up from 161,000 a month earlier, keeping intact expectations for this month's rate hike. The US dollar index, driven to 16-year highs on speculation President-elect Donald Trump's policies will stoke US economic growth and inflation, fell as the greenback slipped against the pound after Britain's Brexit secretary David Davis said the nation would consider making ongoing payments to the European Union to secure favourable market access.

"Non-farm payrolls is the big event but the kiwi isn't going anywhere," said Tim Kelleher, head of institutional foreign exchange sales at ASB Bank. Gains in the pound were likely exaggerated because "the market has massive short positions in sterling".

He said the kiwi "still has a very solid base" of 70 US cents to 70.50 cents and exporters have been "buying on dips".

The local currency declined to 66.48 euro cents from 66.83 cents after Reuters reported that the European Central Bank planned to extend its bond purchases beyond March and may send a message at its policy meeting next week that the stimulus measures would end eventually.

The trade-weighted index slipped to 77.85 from 78.04.

The kiwi fell to 95.37 Australian cents from 95.67 cents and declined to 4.8711 yuan from 4.8837 yuan. It traded at 80.75 yen from 80.86 yen.

BusinessDesk.co.nz

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