Sharechat Logo

NZ dollar tad higher ahead of domestic jobs data

Wednesday 1st May 2019

Text too small?

The New Zealand dollar has shrugged off weak manufacturing data in China ahead of key domestic jobs data.

The kiwi was trading at 66.79 US cents at 8am in Wellington from 66.62 at 5pm. The trade-weighted index was at 72.77 points from 72.68.

The kiwi had eased on the back of China's weaker-than-expected manufacturing but pared those losses as the greenback came under further pressure ahead of the US Federal Reserve rate decision early Thursday New Zealand time.

Today's jobs data - due mid-morning - is the last piece of data ahead of the central bank's May 8 monetary policy decision, the first to be made by a committee. Employment has become a key focus as the Reserve Bank now has a dual mandate to support maximum sustainable employment and keep annual CPI inflation between 1 percent and 3 percent over the medium term, with a focus on the mid-point of 2 percent.

Economists are expecting the unemployment rate to ease to 4.2 percent from 4.3 percent and for wage inflation to remain muted. 

The central bank surprised markets in its most recent statement in March when it said its next likely move was a rate cut. 

"A stable or even slightly lower unemployment rate should set the scene for the RBNZ to deliver a dovish May MPS but hold off on an OCR cut. A higher unemployment rate and subdued wage inflation would add to the risk of a rate cut as soon as May," said ANZ Bank FX/rates strategist Sandeep Parekh. 

Once the jobs data is out of the way, attention will shift to tomorrow's Federal Reserve rate decision and any accompanying remarks.  The pressure on the Federal Reserve has increased with US President Donald Trump calling on it to cut interest rates by 1 percentage point and implement some quantitative easing.

"We have the potential to go up like a rocket if we did some lowering of rates, like one point and some quantitative easing," Trump said in a tweet. 

The New Zealand dollar was trading at 94.68 Australian cents from 94.55, at 51.21 British pence from 51.47, at 59.53 euro cents from 59.54, at 74.38 Japanese yen from 74.28 and at 4.4974 Chinese yuan from 4.4885.

(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:

MARKET CLOSE: NZ shares edge lower; power companies under pressure
NZ dollar rises as bets on another OCR cut fade
Broad-based manufacturing pick-up offers silver lining
Global economic outlook not as dark as in August: RBNZ
NZ dollar slips on slew of weak global data, lack of US-China progress
MARKET CLOSE: NZ shares recover as investors re-think RBNZ review
NZ dollar falls on weak Aussie jobs numbers, poor China data
Govt media plan won't weaken commercial players - TVNZ
Goodman trust's 1H net profit quadruples on unrealised property gains
Regional house price inflation accelerates in October

IRG See IRG research reports