NZ dollar jumps higher after weak US employment cost data
The New Zealand dollar jumped higher after weak data on US employment costs prompted traders to pull back expectations for US interest rate hikes.
The New Zealand dollar jumped higher after weak data on US employment costs prompted traders to pull back expectations for US interest rate hikes.
The kiwi touched a high of 66.73USc over the weekend, and was trading at 65.88USc at 8am in Wellington, from 65.82USc at the New York close and 65.87USc at 5pm on Friday. The trade-weighted index was little changed at 70.28 from 70.31 on Friday.
The greenback weakened after the US second quarter employment cost index recorded its slowest quarterly pace of growth on record. The data raised concern weak inflation may prompt the US Federal Reserve to hold off raising interest rates this year.
"The US dollar weakened after the ECI index disappointed," ANZ Bank New Zealand agri economist Con Williams and senior FX strategist Sam Tuck said in a note. "This strengthened the hand of dovish members of the Federal Reserve Open Market Committee who remain circumspect about when inflation will return to the Fed's target."
The US employment cost index advanced 0.2% in the second quarter, less than the 0.6% gain expected and down from 0.7% the previous quarter. While subsequent analysis revealed it was mostly due to one-off factors, the reaction shows how sensitive markets are to US data, ANZ said.
Tonight, the focus will be on US manufacturing, personal income and spending data.
ANZ expects the kiwi to trade between 65.20USc and 66.50USc today.
The New Zealand dollar slipped to 90.12Ac cents from 90.20Ac on Friday. Australia has data on manufacturing, inflation and job advertisements for July, as well as new home sales for June.
The local currency fell to 59.97 euro cents from 60.17 cents on Friday. It was little changed at ¥81.65 from ¥81.66 on Friday and at 42.12 British pence from 42.18p.
(BusinessDesk)
Tina Morrison
Mon, 03 Aug 2015
Mon, 03 Aug 2015
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NZ dollar jumps higher after weak US employment cost data
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