NZ dollar down ahead of data

Photo / File
Photo / File

The New Zealand dollar was little changed on a day that provided new information about the economy, kicking off a week that includes labour market data, the latest GlobalDairyTrade auction and the minutes of the last Federal open Market Committee meeting.

The kiwi dollar traded at 71.75 US cents as at 5pm in Wellington, from 72 cents in late New York trading on Friday. The kiwi climbed as high as 72.53 US cents on Friday after figures showed little changed US retail sales for July against forecasts for a 0.4 percent gain.


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The trade-weighted index slipped to 76.07 from 76.30 at the end of last week.The household labour force survey for the second quarter is expected to show the unemployment rate rose to 6.3 percent from 6.2 percent, not enough to change expectations for the timing of further central bank rate cuts, while the dairy futures market is pointing to a second jump in prices at this week's dairy auction.

The FOMC minutes will provide details of the Fed's position after it kept the Fed funds rate unchanged as expected while pointing to moderate strength in the US labour market and saying near-term risks to the economic outlook had diminished.

"The kiwi has been stable over the day but has lost quite a bit of its upward moment," said Imre Speizer, senior market strategist at Westpac Banking Corp.

"There's plenty of catalysts this week with the FOMC minutes, the dairy auction and the labour data."Speizer said data he looks at indicates whole milk powder could rise 12 percent in this week's auction, adding to the 10 percent gain two weeks ago.

"The market will take notice - I think they will buy the kiwi," he said.The kiwi didn't move much after a survey showed New Zealand's services sector, which accounts for about two-thirds of the economy, slowed in July to its lowest point in 20 months, ending a run of above-average expansion.

The BNZ-BusinessNZ performance of services index fell 2.4 index points to a seasonally adjusted 54.2 last month, with all five sub-indices dropping.The kiwi traded at 93.79 Australian cents from 94.12 cents in New York on Friday. It dropped to 4.7699 yuan from 4.7733 yuan and fell to 72.69 yen from 72.84 yen.

The local currency declined to 55.53 British pence from 55.77 pence and slipped to 64.31 euro cents from 64.44 cents.New Zealand's two-year swap rate fell 4 basis point to 1.91 percent and 10-year swaps dropped 6 basis points to 2.34 percent.

- BusinessDesk

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