The New Zealand dollar fell to a week-low against its trans-Tasman counterpart after Australia added more jobs than expected last month and as Chinese trade figures were unexpectedly upbeat.
The kiwi fell as low as 92.26 Australian cents, trading at 92.39 cents at 5pm in Wellington from 93.02 cents yesterday. The local currency traded at 86.56 US cents at 5pm from 86.59 cents at 8am, down from 86.88 cents yesterday, after Reserve Bank governor Graeme Wheeler said he may sell the kiwi which he considers overvalued.
Australia added 14,200 full-time jobs in April, according to the Bureau of Statistics, and more than the 9,000 expected. That added to two months of strong employment growth and added to improving sentiment about Australia's economy. The Australian dollar also got a boost from Chinese trade figures showing a 0.9 percent increase in exports and a 0.8 percent rise in imports, driving a bigger surplus than anticipated.
"It was a pretty positive jobs number, and then the Chinese data gave the Aussie another boost," said Martin Rudings, client adviser at OMF. "Market positioning has a lot of people long on the kiwi against the Aussie, but the signal today with the Aussie numbers is that it might be time to take some money off the table."
The kiwi dollar started the day on the backfoot after New Zealand's Reserve Bank governor Wheeler said yesterday it would be opportune to intervene if the currency remains elevated in the face of deteriorating economic fundamentals. Westpac Banking Corp economists today lowered their forecast track for interest rate hikes, predicting a pause in July rather than another increase.
