Kiwi up after jobs trans-Tasman data beats expectations

The New Zealand dollar recovered its losses from yesterday – when the Reserve Bank confirmed it intervened in foreign exchange markets – after jobs data on both sides of the Tasman beat expectations, stoking confidence in the Australasian economies.

The kiwi rose to 84.56 US cents at 5pm in Wellington from 83.85 cents at 8am and 83.97 cents yesterday. The Australian dollar rose to $US1.0233 from $US1.0186 yesterday.

New Zealand's jobless rate fell 0.6 of a percentage point to 6.2 percent in the March quarter, according to Statistics NZ, beating the 6.8 percent expected in a Reuters survey of economists, and Australia's unemployment rate of 5.5 percent in April was just below expectations.

The better than expected labour data underpinned gains in the trans-Tasman economies, with the jobs markets in both nations showing signs of strain in recent months.

The New Zealand unemployment rate "will be a surprise to the Reserve Bank", which was forecasting 6.7 percent in the 2013 March quarter, says Imre Speizer, market strategist at Westpac Banking Corp in Auckland. "The kiwi is still in the wider uptrend between 82.50 US cents and 87 cents, though I still favour it testing 82.50 over the next."

The jobs data unwound yesterday's drop in the kiwi after Reserve Bank governor Graeme Wheeler told politicians the bank had intervened in foreign exchange markets, which sent the current three-quarters of a cent lower.

Mr Speizer says that was not a proper full intervention, such as when it spent $2.2 billion over two months to trim the top off the kiwi in mid-2007 – rather it was part of its monthly foreign exchange turnover where it can tinker at the margins as part of its regular operations.

The kiwi gained to 82.60 Australian cents from 82.43 cents yesterday and advanced to 83.45 yen from 83.08 yen. It increased to 64.23 euro cents from 64.13 euro cents and rose to 54.40 British pence from 54.28 pence.

The trade-weighted index gained to 77.97 from 77.66 yesterday.

(BusinessDesk)