Dollar drops as jobs growth stalls, dairy prices fall
Kiwi dropped to 66.57 US cents at 5pm in Wellington.
The New Zealand dollar fell after data showed jobs growth unexpectedly stalled and dairy prices fell at the latest GlobalDairyTrade auction, adding pressure to the Reserve Bank to cut interest rates when it next reviews the Official Cash Rate in December.
The kiwi dropped to 66.57 US cents at 5pm in Wellington from 66.91 cents at 8am, and 67.46 cents yesterday. The trade-weighted index declined to 71.76 from 73.05 yesterday.
New Zealand's unemployment rate rose 6 percent in the September quarter, while employment unexpectedly shrank 0.4 percent, when investors had been expecting an increase. The weaker-than-expected data followed a 7.4 percent drop in the average price at Fonterra Cooperative Group's GDT auction, and milk futures pricing indicates they may extend their decline.
Dairy prices "could overshoot the downside on this move - that's certainly a question and we'll have to wait and see, but it does push the RBNZ closer to a cut in December," said Martin Rudings, senior deal foreign exchange at OMF in Wellington. "The kiwi was the worst performing currency last night and could easily well be again tonight."
New Zealand's two-year swap rate fell two basis points to 2.76 percent, and the 10-year swap rose two basis points to 3.56 percent.
The local currency fell to 92.30 Australian cents from 93.69 cents yesterday after government data showed retail sales across the Tasman rose in line with expectations, while the trade deficit narrowed.
OMF's Rudings said the kiwi could extend its decline against the Australian dollar, and will initially target 91 cents.
The local currency fell to 4.2163 Chinese yuan from 4.2736 yuan yesterday, and dropped to 80.66 yen from 81.37 yen. It declined to 60.77 euro cents from 61.23 cents, and slipped to 43.17 British pence from 43.74 pence.
(BusinessDesk)
Paul McBeth
Wed, 04 Nov 2015
Wed, 04 Nov 2015
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Dollar drops as jobs growth stalls, dairy prices fall
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