(BusinessDesk) - The New Zealand dollar rose as dairy product prices gained for the third straight auction and as traders await employment data that may show a higher jobless rate and slower employment growth in the fourth quarter.
The kiwi traded at 73.06 US cents as at 8am in Wellington from 72.63 cents in Asia yesterday. The trade-weighted index was at 74.83 from 74.84 yesterday.
The GDT price index climbed 5.9 percent at the GlobalDairyTrade auction overnight and whole milk powder rose 7.6 percent to US$3,226 a tonne, helping underpin the kiwi dollar. The currency has been relatively unscathed by gyrations in global stock markets although the New Zealand stock market is expected to take in some of Wall Street's slump on Monday, playing catch-up after the Waitangi Day holiday. The two-year swap rate shed 5 basis points to 2.10 percent.
Economists expect figures today will show the unemployment rate rose to 4.7 percent in the fourth quarter from 4.6 percent three months earlier, while employment growth slowed to 0.4 percent from 2.2 percent. The market is also awaiting the latest monetary policy statement on Thursday amid expectations of a steady-as-it-goes tone and an unchanged official cash rate of 1.75 percent.
"A strong dairy auction provided the NZD with support overnight," said Con Williams, rural economist at ANZ Bank New Zealand, in a note. "Downside pressure could come from Q4 labour market data unwinding some of its strength from the previous quarter and ahead of the RBNZ."
The local currency traded at 79.74 yen from 79.23 yen yesterday and rose to 92.61 Australian cents from 92.18 cents yesterday when the Reserve Bank of Australia kept its key rate unchanged at 1.5 percent. It traded at 58.94 euro cents from 58.72 cents yesterday and rose to 52.28 British pence from 52.03 pence. The kiwi gained to 4.5904 Chinese yuan from 4.5648 yuan.
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