Dollar rises after US jobs data misses expectations

The New Zealand dollar gained after a key US employment report failed to meet expectations, pushing out the likely timing of US interest rate hikes.

The kiwi advanced to 74.85 US cents at 8am in Wellington, from 74.86 cents at the New York close and 74.55 cents at 5pm in Wellington on Friday. The trade-weighted index rose to 77.31 from 77.08 on Friday.

Traders pushed out their expectations for US interest rate rises until at least September after key non-farm payrolls figures were revised lower for previous periods, and the latest figures were a touch softer than expectations, showing 223,000 jobs were added in April, compared with the 225,000 expected. Investors were also concerned about the subdued hourly earnings figures which advanced just 0.1 percent in the latest month, missing expectations for a 0.2 percent gain, taking the annual pace of growth to 2.2 percent.

"Despite the headline result meeting expectations, the data disappointed marginally, with negative revisions to March non-farm payrolls growth and average hourly earnings remaining subdued," ANZ Bank New Zealand senior economist Philip Borkin and senior FX strategist Sam Tuck said in a note. "The US dollar remained on the back foot, as markets digested the details. This helped lift (the) New Zealand dollar."

ANZ expects the kiwi to trade between 74.40 US cents and 75.60 cents today.

ANZ expects the Chinese interest rate cut at the weekend will have limited positive reaction for the New Zealand dollar. The People's Bank of China cut interest rates for the third time in six months yesterday in a bid to lower companies' borrowing costs and bolster the world's second-largest slowing economy.

In New Zealand today, the government releases its March financial statements at 10am and electronic card transaction data for April is published at 10:45am.

The New Zealand dollar edged up to 94.25 Australian cents from 94.19 cents on Friday ahead of a report on Australian April business confidence at 1:30pm New Zealand time today.

The local currency advanced to 48.42 British pence from 48.04 pence on Friday ahead of the release of the Bank of England decision on interest rates today, where no change is expected.

The kiwi rose to 66.81 euro cents from 66.45 cents on Friday and increased to 89.57 yen from 89.36 yen.

(BusinessDesk)