Sharechat Logo

NZ dollar falls as strong US jobs report fuels greenback

Monday 6th October 2014

Text too small?

The New Zealand dollar fell after better-than-expected US employment figures fuelled optimism about the strength of recovery in the world's biggest economy, stoking demand for the greenback.

The kiwi traded at 77.65 US cents at 8am in Wellington from 77.62 cents at the close of trading in New York, down from 78.64 cents at the New Zealand close last week. The trade-weighted index dropped to 76.28 from 76.63 at 5pm in Wellington last Friday.

The US added 248,000 jobs in September, pushing the unemployment rate to a six-year low 5.9 percent, according to Labor Department figures. That beat market expectations for 215,000 jobs to be added in the month and a jobless rate of 6.1 percent, prompting a rally in US stocks and the greenback on growing anticipation the Federal Reserve will start hiking interest rates as the US economy gathers steam. Minutes to the Federal Reserve's September meeting and a slew of central bank speakers will be closely watched by the market this week.

"The US continues to create jobs faster than Fed officials expect, underpinning risks that the Fed may begin to raise interest rates before mid-2015," Westpac Banking Corp market strategist Imre Speizer said in a note. "Both the Australian and New Zealand dollars shed more than 1 US cent on the strong US data."

The kiwi dollar has come off a peak in July amid falling commodity prices for logs and dairy, two of New Zealand's biggest exports, and has been helped on its way by the Reserve Bank confirming it intervened in currency markets in August. Governor Graeme Wheeler has called the local currency unjustifiably and unsustainably high since July, with the kiwi falling more slowly than commodity prices.

Traders will be watching New Zealand property value data today to gauge how fast the housing market is cooling. The central bank imposed restrictions on low equity home lending last October as a means to take the heat out of the market without having to resort to hiking interest rates for fear of fuelling demand for an already strong currency.

The kiwi traded at 89.45 Australian cents at 8am in Wellington from 89.41 cents last week, and fell to 85.16 yen from 85.54 yen. It was little changed at 62.05 euro cents from 62.13 cents last week, and declined to 48.56 British pence from 48.74 pence.

 

 

 

 

BusinessDesk.co.nz

Bond Offer: Infratil Ltd, 7.2 year & 10.2 year unsecured unsubordinated bond


  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:

NZ dollar mixed, buffeted by Fed talk and downunder data
Super Fund can expect lower returns over next decade - review
ANALYSIS: Should penalties for continuous disclosure breaches be relaxed?
Fletcher seeks urgent talks on Ihumatao stalemate
NZ economy grows 0.5% in June quarter, beating expectations
Restaurant Brands lifts 2Q sales; appetite for KFC offsets ditched Starbucks
Auckland jet fuel arrangements a potential barrier to new entrants
NZ dollar weaker after Fed split on outlook for further US cuts
Leading judge says court administration model 'outdated'
MARKET CLOSE: NZ shares fall; Goodman placement sees property stocks sold

IRG See IRG research reports