The New Zealand dollar is currently trading at just about 70 US cents. Photo/123RF.
The New Zealand dollar held near its lowest levels in more than four months as the US unemployment rate fell more than expected and traders looked ahead to a week that includes the Reserve Bank's policy review and the Australian budget.
The kiwi traded at 70.16 US cents as at
8am in Wellington from 70.18 cents in New York on Friday and from 70.23 cents in Asia at the end of last week. It dropped to 69.83 cents last week, the lowest since late December. The trade-weighted index was at 73.29 from 73.25 in New York, below the 75 level the Reserve Bank projected as an average for the second quarter in its last monetary policy statement.
A US Labour Department report on Friday showed US nonfarm payrolls rose by 164,000 jobs in April, less than expected, while the unemployment rate fell to 3.9 percent. Meanwhile, average hourly earnings increased 0.1 percent last month. The figures were seen as a mixed picture for employment market strength in the US, providing little evidence that the Federal Reserve should quicken its pace of interest rate hikes.
"Equities rose and USD continued its upward trend, with US economic outperformance in focus," said Liz Kendall, senior economist at ANZ Bank New Zealand, in a note. The fall in US unemployment "drew the attention of markets, despite slightly weaker-than-expected employment growth and a dip in earnings growth. The USD responded, continuing its recent rally."
The kiwi dollar fell to 93.03 Australian cents from 93.28 cents on Friday in New York ahead of this week's federal budget across the Tasman. In New Zealand, the RBNZ's policy statement on Thursday is likely to be the highlight. Under new governor Adrian Orr the bank is expected to keep policy broadly unchanged and hold the official cash rate at 1.75 percent, with Orr's delivery and the new mandate to take regard of employment likely to be closely watched.
