Sharechat Logo

NZ dollar falls vs Canadian dollar after jobs report points to Canuck rate hike this week

Monday 10th July 2017

Text too small?

The New Zealand dollar fell to its lowest level in almost two months against the Canadian dollar after figures showed the Canadian economy added more than four times more jobs than expected in June, stoking talk of a rate hike as soon as this week. 

The kiwi dollar traded at 93.64 Canadian cents as at 8am in Wellington, having fallen as low as 93.46 cents on Friday in New York, the lowest since May 22, down from 94.56 cents last week in Asia. The kiwi slipped to 72.70 US cents from 73.80 cents in New York.

The Canadian dollar, known as the loonie, rose to a 10-month high against the greenback after Statistics Canada said 43,300 jobs were added last month, against expectations of 10,000, while the jobless rate fell to 6.5 percent, the lowest since April., Even though the jobs growth was largely part-time positions the report was seen as a sign of economic strength. The US also reported stronger June employment, with 222,000 jobs added, although wage inflation remained weak and the greenback managed only a modest gain.

"Canada’s employment report had more impact on the market, with strong employment growth cementing in expectations for a hike this week," said Jason Wong, currency strategist at Bank of New Zealand. "The OIS market prices in a 95 percent chance of a 25 basis points hike to 0.75 percent, which would officially make the Bank of Canada the second major central bank to kick off a tightening cycle."

Wong said the US non-farm payrolls report "was seen to encourage the Fed to continue along its guided path of policy normalisation, which saw yields nudge higher." The Federal Reserve has a third rate hike projected for 2017. 

Globally, interest rates continued to rise and in New Zealand, the 10-year swap rate at 3.41 percent, is sitting at about its highest level since early May.

America's isolation over climate change was a feature of the Group of 20 meeting in Hamburg over the weekend, with anti-globalisation protestors gaining as much publicity outside the venue. 

The trade-weighted index was little changed at 78.29.

The local currency fell to 95.58 Australian cents from 95.75 cents in New York on Friday and declined to 4.9464 yuan from 4.9512 yuan. It traded at 56.41 pence from 56.44 pence on Friday and traded at 82.78 yen from 82.85 yen. It dropped to 63.77 euro cents from 63.85 cents.

(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 mixed after strong Australian employment data
Energy efficiency key to lowering cost of renewables push - EECA
Paper recycling costs rising 35% as export markets collapse
First Union leading rivals for biggest average pay claims, says bargaining firm
Fonterra to go coal-free 11 years ahead of schedule
Huawei committed to NZ even if govt doesn’t come around on spy fears
Mercury points to peaking gains as FY production drops 10%
Asset Plus sells Heinz Watties distribution centre for $29.1 mln
18th July 2019 Morning Report
COMMENT: RBNZ's key political omission in its bank capital proposals

IRG See IRG research reports