Kiwi hits two-month low as trans-Tasman labour markets diverge

The New Zealand dollar sank to a two-month low against its Australian counterpart after official figures painted a rosier jobs market across the Tasman as local unemployment rises to a 13-year high.

The kiwi fell to 78.46 Australian cents at 5pm in Wellington, the lowest since September 13, from 79.07 cents yesterday. It dropped to 81.66 US cents from 82.57 cents at 8am and 82.54 cents yesterday.

New Zealand's unemployment unexpectedly rose half a percentage point to 7.3% in the September quarter, the highest rate of joblessness since 1999, Statistics New Zealand says.

That dashed expectations for a slight easing in the headline rate to 6.7%. Across the Tasman, Australia added 10,700 jobs last month, beating expectations and underlining the divide between the neighbouring nations.

"New Zealand's labour market report was terrible – there were no silver linings anywhere," says Joe Capurso, currency strategist at Commonwealth Bank of Australia in Sydney. "It raises the risk the RBNZ might have to do something."

The weak local labour figures come as international investors prepare for US Federal policymakers to figure out how to get around the $US600 billion fiscal cliff of tax hikes and spending cuts.

Stocks on Wall Street plunged after President Barack Obama saw off rival Mitt Romney to keep the White House for a further four years.

"With markets increasingly focused on the fiscal cliff it's going to be bad for equities and for the Aussie and kiwi," Mr Capurso says.

The divergent trans-Tasman labour markets have not prompted CBA to change its view on the kiwi appreciating against the Australian dollar, with New Zealand's currency typically outperforming on the cross-rate during times of global uncertainty.

The kiwi fell to 64.04 euro cents from 64.31 cents and declined to 51.12 British pence from 51.5 pence. It slid to 65.20 yen from 66.17 yen yesterday, and the trade-weighted index dropped to 73.17 from 73.77.

(BusinessDesk)

This article is tagged with the following keywords. Find out more about My Tags

2 Comments & Questions

Commenter icon key: Subscriber Verified

Australia is New Zealand's job market because there are no jobs in New Zealand. An entire generation of our people have left and the ingenuity they could have used to add jobs and prosperity to this economy is gone ... forever.

John, having an open door on immigration from Afghanistan, China, India and being a safe haven for money launderers and copyright thieves is not going to reverse the trend or fix our economy. But I'm sure it keeps immigration consultant cronies very happy.

Reply
Share

Just trying to remember that pledge that we would catch up to Australia?

Reply
Share

Post New comment or question

Plain text

  • No HTML tags allowed.
  • Web page addresses and e-mail addresses turn into links automatically.
  • Lines and paragraphs break automatically.

NZ Market Snapshot

Forex

Sym Price Change
USD 0.7845 0.0017 0.22%
AUD 0.8994 0.0002 0.02%
EUR 0.6203 0.0010 0.16%
GBP 0.4929 0.0003 0.06%
HKD 6.0847 0.0131 0.22%
JPY 84.0120 0.0180 0.02%

Commods

Commodity Price Change Time
Gold Index 1233.8 -1.760 2014-10-14T00:
Oil Brent 85.4 -4.470 2014-10-14T00:
Oil Nymex 81.2 -4.530 2014-10-14T00:
Silver Index 17.4 0.035 2014-10-14T00:

Indices

Symbol Open High Last %
NZX 50 5145.9 5168.7 5145.9 0.33%
NASDAQ 4246.2 4281.3 4213.6 0.32%
DAX 8765.4 8854.4 8812.4 0.15%
DJI 16321.9 16463.7 16321.1 -0.04%
FTSE 6366.2 6403.4 6366.2 0.42%
HKSE 23087.5 23230.3 23048.0 0.67%
NI225 15009.8 15044.3 14936.5 -0.13%