Kiwi falls after unexpected rise in Australian jobless

BUSINESSDESK: The New Zealand dollar followed its Australian counterpart lower in local trading after figures showed unemployment unexpectedly rose across the Tasman last month.

The kiwi fell to 79.31 US cents at 5pm from 79.65 cents at 8am, down from 79.44 cents yesterday. The trade-weighted index was little changed at 72.21 from 72.28 yesterday.

Australia's unemployment rate rose 0.1 percentage point to 5.2% after the so-called "lucky country" shed 27,000 jobs last month, according to the Statistics Bureau.

That was worse than the "no change" expected in a Bloomberg survey of economists, and prompted traders to sell the Australian dollar, which dropped 0.5% after the release, recently trading at $US1.0184.

The labour statistics are "a notoriously volatile series and came in weaker than expected", said Dan Bell, currency strategist at HiFX in Auckland.

"The kiwi had a reasonably quiet day, with the bigger move in the Australian dollar, which came off against the US after the weaker employment figures."

Investors' appetite for risk-sensitive assets was dented after the minutes for the June 19-20 meeting of US Federal Reserve policymakers showed no consensus about further quantitative easing to reinvigorate the world's biggest economy.

Stock markets across fell, with Japan's Nikkei 225 index down 1.4%, Hong Kong's Hang Seng index falling 1.6% and Australia's S&P/ASX 200 index down 0.7%.

Bell said the kiwi will probably continue to trade in a range between 75 US cents and 80 cents over the next few weeks, though the risk is to the downside.

Traders are waiting for Chinese gross domestic product figures tomorrow, which are expected to show growth in the world's second-biggest economy slowed through the second quarter.

China's economy probably grew 7.7% in the three months ended June 30 from a year earlier, slowing from an 8.1% pace in the first quarter, according to a Bloomberg survey.

"People are expecting it to be worse than expected because of the recent liquidity measures the People's Bank of China have embarked on," Mr Bell said. "The last two rate cuts have been surprises."

The kiwi fell to 5.0503 Chinese yuan from 5.0773 yuan yesterday.

The Bank of Korea unexpected cut its benchmark interest rate a quarter-point to 3%, its first cut to the seven-day repurchase rate since February 2009.

The looser monetary policy comes after the South Korean government this month cut its 2012 forecast for export growth to 3.5% from a projected 6.7% expansion in January. Exports account for about half the Asian nation's economic growth.

The kiwi edged up to 910.37 won from 908.82 won yesterday, and was unchanged at 63 yen. It was at 64.75 euro cents from 64.83 cents yesterday, and traded at 51.12 pence from 51.18 pence.

It was little changed at 77.79 Australian cents from 77.87 cents yesterday.