Sharechat Logo

Kiwi tops US75c as weak US jobs data adds to greenback's woes

Thursday 7th October 2010

Text too small?

The New Zealand dollar rose above 75 US cents for the first time since October 2009 after weak American jobs data spurred speculation the Federal Reserve will print more money next month.

Investors' appetite for the greenback was sapped further after the ADP survey of private payrolls showed America unexpectedly shed jobs last month. The survey comes before the widely watched US non-farm payrolls report on Friday.

The yield on 10-year US Treasuries fell 7.6 basis points to 2.4% as investors bet the Fed will increase its asset purchase programme next month after several US central bankers threw their weight behind more quantitative easing.

Australian employment data today is expected to show the so-called ‘lucky country' added 20,000 jobs last month, and if that comes in as expected, the trans-Tasman currencies will probably hold on to their recent gains.

"ADP was poor again - it's never a great correlation with non-farm payrolls but the market has ‘bash the buck' as their mantra," said Tim Kelleher, vice president of institutional banking and markets at Commonwealth Bank of Australia.

"The kiwi's as strong as 10 men - it drifted off in Asia yesterday, but was bought again in Europe."

The kiwi rose to 75.21 US cents from 74.92 cents yesterday, and gained to 67.02 on the trade-weighted index of major trading partners' currencies from 66.97. It increased to 62.35 yen from 62.25 yen yesterday, and was unchanged at 76.97 Australian cents. It slipped to 53.96 euro cents from 54.10 cents yesterday, and advanced to 47.32 pence from 47.04 pence.

Kelleher said the currency may trade between 75 US cents and 75.40 cents today, with American pay-rolls data on Friday the next key event.

Ireland had its credit rating downgraded one notch to A+ by Fitch Ratings, with the agency citing the bigger-than-expected bailout of the country's lenders as a leading cause. Ireland's fiscal deficit is forecast to blow out to 32% of gross domestic product this year.

The so-called currency wars fared up with US Treasury Secretary Tim Geithner complaining about several countries attempting to devalue their currencies. Though he didn't name any of the nations, he said the actions made it difficult to convince China to let the yuan appreciate.

Meanwhile, Chinese Premier Wen Jiabao told a business forum in Brussels to lay off pressuring the world's second biggest economy to strengthen its currency.

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comments to Sharechat go through an approval process. Comments which are defamatory, abusive or in some way deemed inappropriate will not be approved. It is allowable to use some form of non-de-plume for your name, however we recommend real email addresses are used. Comments from free email addresses such as Gmail, Yahoo, Hotmail, etc may not be approved.

Related News:

NZ dollar gains on G20 preference for growth
NZ dollar dips as Wellington CBD checked for quake damage
NZ dollar gains, bolstered by RBA minutes, strong dairy prices
NZ dollar falls after central bank says it may scale up currency intervention
NZ dollar gains before CPI, helped by dairy gains, rally on Wall Street
NZ dollar trades little changed as US budget talks bear down on deadline
NZ dollar falls with equities on view US to sail over fiscal cliff
NZ dollar weakens as fiscal cliff looms, long bets unwind
NZ dollar sinks to three-week low as equities fall, fiscal talks in focus
NZ dollar slips as fiscal cliff talks grind slower in Washington