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NZ dollar falls against Aussie on strong jobs data across Tasman

Thursday 19th July 2018

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The New Zealand dollar fell against its Australian counterpart after stronger-than-expected jobs data across the Tasman indicated growing momentum in the labour market. 

The kiwi traded at 91.41 Australian cents as at 5pm from 91.80 cents at 8am and 91.73 cents yesterday. It was at 67.82 US cents from 67.70 cents yesterday.

Figures from the Australian Bureau of Statistics showed 50,900 net new jobs were added in June, well above expectations of 17,000, according to Reuters. Of those, 41,200 were in full-time positions. The unemployment rate held steady at 5.4 percent.

"Kiwi-Aussie was lifeless until the Aussie jobs number but then it fell pretty sharply," said Imre Speizer, head of NZ strategy at Westpac Banking Corp.  Speizer noted, however, the Australian central bank will be scrutinising the data to see where the growth is and whether it will spark any wage inflation.  

Paul Dales, chief Australia and New Zealand economist for Capital Economics, said the labour market is improving faster than the Australian central bank expected "but the RBA will probably still see this as “gradual” progress. Unless this trend accelerates and/or wage growth rises more significantly, then interest rates are probably still going to remain at 1.5 percent until late next year," he said.  

The trade-weighted index was at 72.89 from 72.76.

The kiwi rose to 51.86 British pence from 51.65 pence yesterday and the local currency was at 58.22 euro cents from 58.13 cents yesterday.

The kiwi traded at 4.5693 Chinese yuan from 4.5389 yuan yesterday and at 76.45 yen from 76.51 yen.

New Zealand's two-year swap rate was unchanged at 2.13 percent and 10-year swaps declined 1 basis point to 3.01 percent.

(BusinessDesk)

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