Sharechat Logo

NZ dollar falls against Aussie on stronger-than-expected jobs numbers

Thursday 15th August 2019

Text too small?

The New Zealand dollar fell against its Australian counterpart after better-than-expected jobs numbers across the Tasman but was little changed against the US dollar.

The kiwi was trading at 94.96 Australian cents at 5pm in Wellington from 95.33 at 8am and at 64.41 US cents at 5pm in Wellington from 64.35.

The Australian data showed a 41,100 gain in employment in July when economists had been predicting just 14,000.

‘’It really smashed it out of the park,” says Mike Shirley, a dealer at Kiwibank.

Marcel Thieliant, an economist at Capital Economics, says the data marked a return to form following a subdued 500 job gain in June and suggests the Reserve Bank of Australia won’t be rushing to cut rates again.

“For now, the RBA will probably remain in wait-and-see mode and we expect it to leave rates unchanged at the next meeting in September,” Thieliant says.

However, a rise in the participation rate to a record high of 66.1 percent of the working-age population meant the unemployment rate held steady at 5.2 percent.

Thieliant says that’s well above the RBA’s latest estimate that the “natural” rate of unemployment is 4.5 percent, which is effectively full employment because of people changing jobs or entering or leaving the workforce.

The RBA will want to see the labour market tighten much further to drive growth in wages and help it meet its 2-3 percent inflation target, he says.

Shirley says that against the US dollar, the kiwi is stuck in a range around 64.50 US cents.

“It’s like there’s a homing beacon attached there. It never wanders too far before it wanders back again,” he says.

Even the yield curve inversion in the US, Germany’s economy contracting and the fears that a global recession is looming, which caused huge sell-offs in equities markets overnight and today, “wasn’t enough to drive the kiwi lower,” Shirley says.

The New Zealand dollar was trading at 53.42 British pence from 53.35, at 57.77 euro cents from 57.76, at 68.22 yen from 68.19 and at 4.5271 Chinese yuan from 4.5175. The trade-weighted index was unchanged at 71.61 points.

Interest rates followed the global trend and plumbed new lows today. The New Zealand two-year swap rate edged down to a bid price of 0.9331 percent from yesterday’s close at 0.9641 and the 10-year swap rate sank to 1.2000 percent from 1.2900.

(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:

SML - Synlait Milk Limited - Trading Halt of Securities
AIA - Auckland Airport announces board chair changes
AIA - Auckland Airport announces board chair changes
CEN - Tauhara commissioning progress update
FPH initiates voluntary limited recall
March 28th Morning Report
KFL Celebrates 20 Years of Excellence in Investment Mgmt.
SVR - Savor FY24 Earnings Guidance & Change in Banking Partner
NZK - NZ King Salmon Investments Limited FY24 Results
March 27th Morning Report