Kiwi falls as unemployment dents rate hike expectations
The dollar falls against the greenback after weak unemployment data stokes expectations the Reserve Bank will move slowly to higher interest rates.
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BUSINESSDESK: The New Zealand dollar fell against the greenback after weaker-than-forecast local unemployment data stoked expectations the Reserve Bank will push out its path to higher interest rates.
The kiwi fell to 81.19 US cents just before 8am from 81.49 cents yesterday at 5pm in Wellington. The trade weighted index was little changed at 73.03 from 73.02.
The unemployment rate unexpectedly rose 0.1 of a percentage point to 6.8% yesterday, while Australia's rate of joblessness fell to 5.2%.
he local number is likely to see the Reserve Bank keep interest rates unchanged for the foreseeable future, while reaffirming the moderate view of growth across the Tasman.
"We have seen quite a shift in monetary policy expectations," said Mike Jones, market strategist at Bank of New Zealand.
"Hit by the double employment whammy yesterday it has hardened expectations that the Reserve Bank is on hold for the foreseeable future, dragging the kiwi off its highs."
China, New Zealand's second-largest export market, will release its trade balance statistics this afternoon.
Yesterday it reported inflation slowed for a fourth month in July, adding to speculation policy makers will take more measures to stimulate growth in the world's second biggest economy.
New Zealand's accommodation survey for June and electronic cards for July will be released by Statistics NZ this morning.
The kiwi moved little at 76.71 Australian cents from 76.76 cents at 5pm yesterday. It was largely unchanged at 51.90 British pence from 51.91 pence and rose to 66.01 euro cents from 65.71 cents. It fell to 63.76 yen from 63.87 yen.
Hannah Lynch
Fri, 10 Aug 2012
Fri, 10 Aug 2012
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
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Kiwi falls as unemployment dents rate hike expectations
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