NZ dollar drops in New York trading
The kiwi traded at 71.31USc as at 8:30am in Wellington.
The New Zealand dollar fell in New York trading after figures showed the US economy stacked on thousands more jobs than expected last month, stoking talk that a Federal Reserve rate hike is still on the cards this year. US stocks and the greenback rallied.
The kiwi traded at 71.31USc as at 8:30am in Wellington, little changed from the New York close on Friday and down from 72.12USc before the jobs data was released. The trade-weighted index was at 75.92, down from 76.39 before the payrolls data on Friday.
A US Labor Department report showed US payrolls rose by 255,000 in July, compared to economist expectations of 180,000, while figures for the previous two months were revised higher. The strong labour market indicators revived speculation the Federal Reserve will lift interest rates, a possibility that has been dialed back in the face of global uncertainties such as the Brexit. The Reserve Bank, by contrast, is expected to cut its benchmark rate on August 11 and signal further easing.
"A surprisingly strong US payrolls report boosted US interest rates and the US dollar, as well as US equities," said Imre Speizer, senior market strategist at Westpac Banking Corp.
He said while the impact of the US payrolls data could linger, "the Reserve Bank's easing cycle combined with the Fed tightening in December should push the NZ dollar lower toward 69USc during the months ahead, although recent Bank of England and Bank of Japan easing have made the kiwi even more attractive to global investment flows such that a test of 73USc is possible first."
The local dollar traded at 54.51 British pence, from 54.59 pence at the New York close on Friday. The kiwi traded at 93.61Ac from 93.65Ac in late New York trading on Friday and rose to ¥72.74 from ¥72.59. It was little changed at 64.33 euro cents and slipped to 4.7449 Chinese yuan from 4.7463 yuan.
(BusinessDesk)
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Jonathan Underhill
Mon, 08 Aug 2016
Mon, 08 Aug 2016
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NZ dollar drops in New York trading
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