Sharechat Logo

Strong Aussie job growth sees NZ dollar ease against $A while firming against greenback

Thursday 15th November 2018

Text too small?

The New Zealand dollar eased against the Aussie dollar after Australia's unemployment rate remained at a six-year low in October but gained against the greenback as global risk appetite ticked higher after the draft Brexit deal. 

The Kiwi traded at 93.44 Australian cents at 5pm in Wellington from 93.91 Australian cents at 8:45 am and from 93.70 cents Wednesday.  It traded at 67.99 US cents from 67.78 US cents late Wednesday. 

Across the Tasman, unemployment was unchanged at 5.0 percent in October, helped by an increase in the participation rate to 65.6 percent from 65.5 percent in September. The September jobs result had been very strong and "this was also a reasonably good result," said Ross Weston, head of trading for Kiwibank. 

Weston said the kiwi was also benefiting from "a risk on move" after UK Prime Minister Theresa May secured a draft deal on Brexit but did come under some pressure after US Federal Chairman Jerome Powell said the strong US economy was likely to continue growing. Powell spoke at a moderated discussion at the Dallas Fed with the reserve bank's president Robert Kaplan. 

According to Dow Jones Newswires, Powell said the main challenge facing the Fed now is to consider how much further to raise rates and the pace at which the central bank raises rates. He said the Fed would evaluate "really carefully...how the markets and the economy and business contacts are reacting to our policy." 

Overall, however, "he seemed relatively upbeat" and the greenback got a bit of a lift, said Weston.

Looking ahead, Weston said with little data on the immediate horizon the US-China trade tensions are likely to be at the front of investors' minds.  News that China has delivered a written response to U.S. demands for wide-ranging trade reforms was viewed as positive, three U.S. government sources said, according to Reuters.  Foreign currency exchange company OFX said the kiwi will likely continue to push higher "as long as investors remain optimistic over upcoming developments." 

The kiwi traded at 52.26 British pence from 52.15 pence Wednesday, and at 59.99 euro cents from 59.91 euro cents. The New Zealand dollar was at 4.7166 Chinese yuan from 4.6913 yuan and at 77.13 yen from 76.97 yen.

The trade-weighted index was at 74.22 from 73.97.

New Zealand's two-year swap rate was unchanged at 2.17 percent; the 10-year swaps were unchanged at 3.04 percent.

(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:

NZ dollar trades near 2019 low on Aussie rate outlook, China worries
Short window left to lock in good interest rates on term deposits
MediaWorks breakeven stymied by radio
Loan-to-value restrictions effective but have some drawbacks - RBNZ
Yili deal a timely cash injection for Westland farmers - ANZ
AFT interested in medicinal cannabis but says it's not commercially viable yet
Serko chalks up another year of 28% sales growth, profit dips on acquisition adjustment
NZ first-quarter retail sales grow 0.7%, slightly better than expected
SkyCity poised to enter online gaming space
AFT narrows net loss, turns cash flow positive

IRG See IRG research reports