NZ dollar drops on unemployment data

Photo / File
Photo / File

The New Zealand dollar fell against the greenback after weaker-than-forecast local unemployment data stoked expectations the Reserve Bank to push out its path to higher interest rates.

The New Zealand dollar fell to 81.19 US cents just before 8am from 81.49 cents yesterday at 5pm in Wellington. The trade weighted index was little changed at 73.03 from 73.02.

New Zealand's unemployment rate unexpectedly rose 0.1 of a percentage point to 6.8 percent yesterday, while Australia's rate of joblessness fell to 5.2 per cent. The local number is likely to see the Reserve Bank keep interest rates unchanged for the foreseeable future, while reaffirming the moderate view of growth across the Tasman.

"We have seen quite a shift in monetary policy expectations." said Mike Jones, market strategist at Bank of New Zealand. "Hit by the double employment whammy yesterday it has hardened expectations that the Reserve Bank is on hold for the foreseeable future, dragging the kiwi off its highs."

China, New Zealand's second-largest export market, will release its trade balance statistics this afternoon. On Thursday, China reported inflation slowed for a fourth month in July, adding to speculation policy makers will take more measures to stimulate growth in the world's second biggest economy.

New Zealand's accommodation survey for June and electronic cards for July will be released by Statistics New Zealand this morning.

The New Zealand dollar was little changed at 76.71 Australian cents from 76.76 cents at 5pm yesterday. It was largely unchanged at 51.90 British pence from 51.91 pence. The kiwi rose to 66.01 euro cents from 65.71 cents. It fell to 63.76 yen from 63.87 yen.

- BusinessDesk

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