Sharechat Logo

NZ dollar falls to 1mth low after US jobs jump

Monday 8th October 2012

Text too small?

The New Zealand dollar fell to a one month low against the greenback after better-than-expected US employment data stoked bets growth in the world's biggest economy is building momentum.

The New Zealand dollar fell to 81.60 US cents, the lowest since Sept. 10 at 8am, from 81.76 cents at the close of trading in New York and 82.41 cents at 5pm on Friday. The trade weighted index was little changed on 72.93 from 72.89.

Friday's US unemployment rate was significantly better than expected, helping boost equities and risky currencies. The effects were short-lived, with Wall Street's Standard & Poor's index falling 0.3 percent. The US jobless rate fell to 7.8 percent last month, the lowest level since January 2009, Labor Department data showed. Payrolls increased by 114,000 workers.

"We saw the kiwi going out reasonably bid in our time zone on Friday but that all changed with the surprise US payrolls data," said Stuart Ive, currency strategist at HiFX. "This led to a broad commodities sell-off and the kiwi and the Aussie coming under pressure. It's leading some to question whether the Fed's monetary stimulus could drop off."

"We need at least two or three more months of data before the Fed will even consider it," Ive said.

In September, US Federal Reserve Chairman Ben Bernanke announced the central bank would expand its holdings of long-term securities with open-ended purchases of US$40 billion of mortgage debt a month.

Markets in the US will be closed on Monday for Columbus Day.

In Europe, finance ministers meet on Tuesday in Luxembourg, where the agenda will be dominated by Spain's economic reforms and its reluctance to formally ask for a financial bailout. Ministers from the wider European Union meet on Wednesday.

The New Zealand dollar was little changed on 62.65 euro cents from 62.72 cents at the close of trading in New York.

There is no significant New Zealand data set for release until Tuesday's New Zealand Institute of Economic Research quarterly survey of business opinion.

The New Zealand dollar rose to 80.30 Australian cents from 80.18 cents and climbed to 64.17 yen from 64.30 yen. The kiwi increased to 50.59 British pence from 50.66 pence.

BusinessDesk.co.nz

  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:

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

IRG See IRG research reports