Sharechat Logo

NZ dollar rises amid poor US economic data

Friday 4th October 2019

Text too small?

The New Zealand dollar rose after poor US economic data suggested growth in the world's largest economy is slowing and as traders covered earlier short positions.

 

 

The kiwi was trading at 63.20 US cents at 5pm in Wellington from 62.99 cents at 8:05am and 62.81 cents in New York last Friday. The trade-weighted index was at 70.54 points from 70.33.

 

 

After weak US manufacturing data earlier this week, companion data on the services sector came in significantly below expectations, although the US services sector is still expanding, unlike the contracting manufacturing sector.

 

 

Tim Kelleher, head of foreign exchange sales at Commonwealth Bank of Australia, says the market had been short US dollars ahead of the end of the September quarter but conditions have returned to normal since then.

 

 

But the weak US data has resulted in selling of the greenback ahead of the monthly jobs figures due later today.

 

 

"If the non-farm payrolls is weak, we could see the US dollar come off quite a bit," Kelleher says.

 

 

The market is expecting the US economy added 145,000 jobs in September following August's 130,000 gain while the unemployment rate should be unchanged at 3.7 percent. Average hourly earnings are expected to be up 3.2 percent on a year ago, the same increase seen in August.

 

 

The kiwí's strength today was reinforced by record short positions in the currency, according to US Commodity Futures Trading Commission figures, Kelleher says.

 

 

Next week, global markets will likely be focused on the resumption of trade talks between the US and China and whether President Donald Trump's public call for China to investigate the son of his political rival, Democrat presidential candidate Joe Biden, will become a disruptive factor.

 

 

The Democrat-controlled House of Representatives has already started an impeachment investigation into Republican Trump's pressuring of the Ukrainian president into opening an inquiry into the Bidens during a phone call.

 

 

It is illegal in the US for anybody running for office to seek or accept help in elections from foreign governments, according to the chair of the Federal Election Commission chair Ellen Weintraub.

 

 

The New Zealand dollar was trading at 93.56 Australian cents from 93.39, at 67.48 yen from 67.31, at 4.5181 Chinese yuan from 4.5023, at 57.57 euro cents from 57.40 cents and at 51.19 British pence from 50.98.

 

 

The two-year swap rate edged down to a bid price of 0.8108 percent from 0.8177. The 10-year swaps were at 1.1025 percent from 1.1300.

 

(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