NZ dollar drifts higher, falls back

The New Zealand dollar fell against an Australia dollar which jumped after data showing a surge in employment argued for domestic interest rates to eventually rise.

The NZ dollar fell to A78.35c at 5pm from A78.67c at 8am and A78.56c at 5pm yesterday.

It traded in a narrow range to be at US72.19c at 5pm from US72.15c at 8am. It closed at US71.70c yesterday.

The big event on the day was data showing Australia added 30,900 jobs in August, better than the expected 29,000 rise. Unemployment dipped to 5.1 per cent.

A huge rise in full-time employment was seen as a boon to domestic demand and consumption, leading investors to speculate the Reserve Bank of Australia may resume raising rates from 4.5 per cent as soon as next month.

The Australian dollar rose to a four month high today and was at US92.10c at 5pm from US91.25c at the same time yesterday.

"The stronger employment data was obviously good for the aussie and there is a chance we will see aussie rates higher in the short term," said Murray Hindley, chief currency dealer at ANZ.

He said the NZ dollar traded between the US72c figure and US72.30c for most of the session and finished in the middle of that range.

- REUTERS reported that the threat of immediate Japanese intervention in the yen tapered off today.

The NZ dollar was at 60.44 yen at 5pm, compared to 59.82 yesterday. It was at 0.5686 euro from 0.5641 yesterday.

The trade weighted index was at 67.10 at 5pm from 66.73 yesterday.

- NZPA