NZ dollar rises on weak US services data; eyes on non-farm payrolls

Friday 4th October 2019

The New Zealand dollar firmed on further signs of weakness in the US economy.

The greenback took a tumble when the Institute for Supply Management said its non-manufacturing activity index fell to a reading of 52.6 in September, the lowest since August 2016. Economists surveyed by Dow Jones had expected a reading of 55.3.

“The respondents are mostly concerned about tariffs, labour resources and the direction of the economy,” ISM said.

The kiwi was trading at 62.99 US cents at 8am in Wellington from 62.62 at 5pm yesterday. The trade-weighted index was at 70.33 from 70.04.

“It’s been a volatile session in global markets as data flow suggested slowing manufacturing activity is spilling over into the services sector,” said ANZ Bank economists Miles Workman and Michael Callaghan.

The data highlight the importance of making progress with China in next week’s trade talks, they said.

Today, investors will be focused on Australian retail sales data as well as the Reserve Bank of Australia’s financial stability report.

Key for markets, however, is the US non-farm payrolls data due overnight. Economists are expecting the US economy added 148,000 jobs but the weakness in manufacturing, services and private-sector jobs growth reported this week could point to a softer read.

The kiwi traded at 93.39 Australian cents from 93.21. It was at 67.31 yen from 67.08 and at 4.5023 Chinese yuan from 4.4752 yuan. It traded at 57.40 euro cents from 57.14 cents and was at 50.98 British pence from 50.89.

(BusinessDesk)

Comments from our readers

No comments yet