Sharechat Logo

RESEND: NZ dollar little changed above 73 US cents after weak US wages growth

Tuesday 7th February 2017

Text too small?

The New Zealand dollar was little changed above 73 US cents having gained following weak US wage inflation figures and rose against the euro after French National Front Leader Marine Le Pen vowed to her country out of the euro-zone if elected.

The kiwi dollar traded at 73.12 US cents as at 8am in Wellington from 73.20 cents in Asian yesterday and from 72.70 cents before the US labour market figures on Friday. The kiwi rose to 68.02 euro cents from 67.90 cents late yesterday.

The US added a higher-than-expected 227,000 jobs last month but average hourly earnings barely budged, rising 0.1 percent against expectations for a 0.3 percent gain, which some traders took as a sign the Federal Reserve won't need to rush to hike interest rates again. Meanwhile, Le Pen launched her French presidential campaign with a speech filled with anti-globalisation rhetoric and a call for France to leave the economic bloc and resume using its own currency, and the market is assessing the prospects of early Italian elections.

The US payrolls data "saw a combination of strong jobs growth and weak wage inflation, which slightly reduced the chance of the Fed hiking next month," said Jason Wong, currency strategist at Bank of New Zealand, in a note. European political risks have regained the spotlight "ahead of a series of national elections".

Closer to home, traders are awaiting the Reserve Bank's survey of expectations for the first quarter for a take on where businesses see inflation pressures, while across the Tasman the Reserve Bank of Australia is expected to leave its cash rate unchanged at 1.5 percent. This week also sees the latest GlobalDairyTrade auction, with signs prices are struggling amid increased volumes of product on offer.

RBNZ governor Graeme Wheeler is also expected to keep interest rates unchanged this week, with the release of the monetary policy statement on Thursday, although he may revise the track of the official cash rate, which projected no changes from the current level of 1.75 percent over the forecast horizon in the November MPS.

The kiwi rose to 95.54 Australian cents from 95.48 cents late yesterday. It was little changed at 58.65 British pence and traded at 5.0174 yuan from 5.0196 yuan. It fell to 81.71 yen from 82.30 yen.

The trade-weighted index was at 79.44 from 79.38 late yesterday.

BusinessDesk.co.nz



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.
Bookmark and Share   Printable version
Related News

NZ migration hits record in July despite more Kiwis leaving
Labour's water charging policy 'reckless', says English
Labour confirms royalties for bottled water and irrigation schemes
New regulatory regime for telecommunications lines hits Parliament
Auditor General resigns ahead of Transport Ministry fraud report
Investors taking a wait-and-see stance after Labour leader Little steps down
NZ business confidence's traditional winter cooling not so frosty in July
Business lobby supports govt backdown on immigration
NZ migration, tourism soar to new annual records
Little says Labour would target $600M in unpaid taxes from multinationals

IRG See IRG research reports