Kiwi drops with commodity currencies as crude, dairy fall, jobs data looms
The New Zealand dollar fell along with other so-called commodity currencies as crude oil fell and prices unexpectedly declined in the latest GlobalDairyTrade auction.
The kiwi dollar declined to 74.70 US cents as at 8am in Wellington from 75.04 cents late yesterday. The trade-weighted index slipped to 78.53 from 78.72.
Brent crude oil fell about 1.7 percent to US$51.83 a barrel overnight and the CRB Index of 19 commonly traded commodities fell 0.7 percent. Meanwhile, dairy product prices fell at the GlobalDairyTrade auction, declining for the third time in four auctions, amid concern about extra supply. The GDT price index slid 1.6 percent from the previous auction two weeks ago to US$3,343. In New Zealand, traders are now awaiting second-quarter labour market data this morning.
Commodity currencies "are all lower against the USD overnight as oil gave back part of its large gains over the past week as the market awaits signs of rebalancing," Doug Steel, economist at Bank of New Zealand, said in a note. "The NZD was not helped by dairy prices easing 1.6 percent at the latest GDT auction, against expectations of a small rise."
The employment figures are expected to show the jobless rate fell to 4.8 percent from 4.9 percent while employment growth slowed to 0.7 percent from 1.2 percent in the first quarter. Wage pressures probably remained tepid.
Traders are also watching for a speech on banking regulation by Reserve Bank deputy governor Grant Spencer this morning.
The kiwi rose to 93.68 Australian cents from 93.48 cents yesterday. It fell to 63.28 euro cents from 63.43 cents and slipped to 82.42 yen from 82.69 yen. It declined to 56.54 British pence from 56.77 pence and traded at 5.0163 yuan from 5.0409 yuan.