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NZ dollar rangebound ahead of US payrolls data

Thursday 3rd October 2019

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The New Zealand dollar stuck to a tight range as the US dollar remains under pressure ahead of key jobs data there overnight Friday.

The kiwi was trading at 62.62 US cents at 5pm in Wellington from 62.69 cents at 7:50 am. The trade-weighted index was at 70.04 from 70.14.

The kiwi got a strong lift overnight after weak US private-sector jobs data and “took a bit of a rest today,” said Westpac Bank senior market strategist Imre Speizer. The greenback – already under pressure after weak manufacturing data the previous day – took a further tumble when hiring by US private firms slowed further in September and was revised lower for August. 

Speizer said the New Zealand dollar has been largely propped up because the US dollar has been on the backfoot after the soft data, but overall the trend for the kiwi is down.

Overnight, markets will be watching for the US Institute for Supply Management’s September non-manufacturing survey, Speizer said. He expects it to hold up better than the manufacturing data, which rattled markets with a slide to a 10-year low. The services sector has been more resilient, he said. US August factory orders data will also garner some attention.

However, the main event will be the September employment data on Friday, he said. Speizer said economists are expecting 148,000 new jobs but after the weak data this week the market is likely primed for a weaker number and so the greenback may not fall too much further.

Ahead of that data, investors will be watching for Australia’s August retail sales data tomorrow, in particular after the Reserve Bank of Australia cut rates by another 25 basis points to a record low 0.75 percent earlier this week. The RBA also has its financial stability report but Speizer said it is unlikely to cause much reaction.

The kiwi traded at 93.21 Australian cents from 93.42. It was at 67.08 yen from 67.16 and at 4.4752 Chinese yuan from 4.4787 yuan. It traded at 57.14 euro cents from 57.19 cents and was at 50.89 British pence from 50.94.

The two-year swap rate edged down to a bid price of 0.8177 percent from 0.8476 while the 10-year swaps were at 1.1300 percent from 1.1750.


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