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NZ dollar advances as US dollar weakens following softer jobs data

Tuesday 10th September 2013

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The New Zealand dollar advanced, tracking most of its peers, as the US dollar weakened following softer US jobs data last week.

The kiwi rose to 80.22 US cents at 8am in Wellington, from 79.80 cents at the 5pm market close yesterday. The trade-weighted index advanced to 75.60 from 75.41 yesterday.

The dollar index, which measures the greenback against a basket of six currencies, extended its decline from Friday when a report showing weaker than expected jobs data fuelled uncertainty about whether the Federal Reserve will start tapering its stimulus at its meeting next week.

"Overnight, the New Zealand dollar was a beneficiary, along with most of its peers, of broad US dollar weakness," Kymberly Martin, a strategist at Bank of New Zealand, said in a note. "The lingering impact of Friday's US payrolls report continued to dominate markets."

The New Zealand dollar has scope to rise further on US dollar weakness, according to the BNZ's short-term fair value range for the currency of 80 to 86 US cents.

Risk appetite has improved with the suggestion Syria could avert a US attack by relinquishing its chemical weapons, traders said.

In New Zealand today, a report will be released at 10:45am on credit card spending for August.

Traders will also be eyeing a slew of August data from China including industrial production, retail sales, fixed asset investment and money supply, following stronger than expected export data at the weekend.

The New Zealand dollar edged up to 86.85 Australian cents at 8am in Wellington from 86.75 cents yesterday and advanced to 79.87 yen from 79.54 yen. The local currency weakened to 60.49 euro cents from 60.57 yesterday and gained to 51.09 British pence from 50.99 pence.

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