Sharechat Logo

NZ dollar holds near 4-month low as lower US jobless rate helps greenback, MPS looms

Monday 7th May 2018

Text too small?

The New Zealand dollar held near its lowest levels in more than four months as the US unemployment rate fell more than expected and traders looked ahead to a week that includes the Reserve Bank's policy review and the Australian budget. 

 

The kiwi traded at 70.16 US cents as at 8am in Wellington from 70.18 cents in New York on Friday and from 70.23 cents in Asia at the end of last week. It dropped to 69.83 cents last week, the lowest since late December. The trade-weighted index was at 73.29 from 73.25 in New York, below the 75 level the Reserve Bank projected as an average for the second quarter in its last monetary policy statement.

 

A US Labour Department report on Friday showed US nonfarm payrolls rose by 164,000 jobs in April, less than expected, while the unemployment rate fell to 3.9 percent. Meanwhile, average hourly earnings increased 0.1 percent last month. The figures were seen as a mixed picture for employment market strength in the US, providing little evidence that the Federal Reserve should quicken its pace of interest rate hikes.

 

"Equities rose and USD continued its upward trend, with US economic outperformance in focus," said Liz Kendall, senior economist at ANZ Bank New Zealand, in a note. The fall in US unemployment "drew the attention of markets, despite slightly weaker-than-expected employment growth and a dip in earnings growth. The USD responded, continuing its recent rally."

 

The kiwi dollar fell to 93.03 Australian cents from 93.28 cents on Friday in New York ahead of this week's federal budget across the Tasman. In New Zealand, the RBNZ's policy statement on Thursday is likely to be the highlight. Under new governor Adrian Orr the bank is expected to keep policy broadly unchanged and hold the official cash rate at 1.75 percent, with Orr's delivery and the new mandate to take regard of employment likely to be closely watched.

 

Also of interest, this week is a pre-budget speech by Finance Minister Grant Robertson.

 

The kiwi fell to 4.4614 yuan from 4.4652 yuan on Friday and traded at 51.83 British pence from 51.89 pence. It was at 76.59 yen from 76.62 yen and at 58.66 euro cents from 58.74 cents.

 

(BusinessDesk)

  General Finance Advertising    

Comments from our readers

No comments yet

Add your comment:
Your name:
Your email:
Not displayed to the public
Comment:
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:

Government outlines planned hikes in minimum wage
Chorus could lift its dividend post-UFB rollout but risks remain
T&G Global profit dented by cheaper tomatoes, small grape harvest
NZ posts widest current account deficit since 2009, in line with expectations
Heartland says new bank capital rules won't hurt as much as the market thinks
ISS supports Vital Healthcare's rebel investors
December 19th Morning Report
RBNZ's bank capital proposals are 'radical', says rating agency Fitch
Cheaper petrol, low mortgage rates bolster consumer confidence in run-up to Xmas
NZ dollar holds gains as investors await Fed review

IRG See IRG research reports