"The headline levels in the labour market figures are strong and the market is tightening up with employment running along very nicely, but the wage inflation story is really non-existent and that's the more important message for the RBNZ here," ANZ Bank New Zealand senior economist Phil Borkin said. "The kiwi got close to that 70 (US cents) level, but we've peeled off a little bit" as investors got past the headline numbers and looked more closely at the detail, he said.
Prime Minister Bill English today said the kiwi was at a "pretty positive" level for exporters and near 70 US cents or a little lower wasn't a bad balance for the country.
The kiwi could push a little higher in the near-term after dropping near a 10-month low last week when the prospect of growing trade protectionism weighed on New Zealand's prospects as a nation reliant on overseas markets, however ANZ still expects it will drift modestly lower over the coming 12 months as the US economy continues to expand and the Federal Reserve marks a return to more normal monetary policy settings.
The Fed will end a two-day policy meeting on Wednesday in Washington and is expected to keep its fed funds rate target at 0.75 per cent to 1 per cent, having pencilled in two rate hikes later this year.
Other data today showed New Zealand property values plateaued in April as tightening credit conditions and lending restrictions weighed on the number of sales. Separate figures showed the volume of house sales dropped in Auckland.
The kiwi rose to 92.51 Australian cents from 91.66 cents late yesterday after Australia's central bank kept its cash rate unchanged as expected. It gained to 4.7872 yuan from 4.7672 yuan and rose to 77.84 yen from 77.37 yen. It gained to 63.55 euro cents from 63.37 cents and advanced to 53.81 British pence from 53.63 pence.
The two-year swap rate slipped 1 basis point to 2.29 per cent and 10-year swaps fell 3 basis points to 3.35 per cent.
