NZ dollar little changed above 73USc after weak US wages growth

The New Zealand dollar was little changed above 73USc, having gained following weak US wage inflation figures, and rose against the euro after French National Front Leader Marine Le Pen vowed to take her country out of the eurozone if she is elected.

The kiwi dollar traded at 73.12USc as at 8am in Wellington from 73.20USc in Asian yesterday and from 72.70USc before the US labour market figures on Friday. The kiwi rose to 68.02 euro cents from 67.90 cents late yesterday.

The US added a higher-than-expected 227,000 jobs last month but average hourly earnings barely budged, rising 0.1% against expectations for a 0.3% gain, which some traders took as a sign the Federal Reserve won't need to rush to hike interest rates again. Meanwhile, Ms Le Pen launched her French presidential campaign with a speech filled with anti-globalisation rhetoric and a call for France to leave the economic bloc and resume using its own currency, and the market is assessing the prospects of early Italian elections.

The US payrolls data "saw a combination of strong jobs growth and weak wage inflation, which slightly reduced the chance of the Fed hiking next month," said Jason Wong, currency strategist at Bank of New Zealand, in a note. European political risks have regained the spotlight "ahead of a series of national elections."

Closer to home, traders are awaiting the Reserve Bank's survey of expectations for the first quarter for a take on where businesses see inflation pressures, while across the Tasman the Reserve Bank of Australia is expected to leave its cash rate unchanged at 1.5%. This week also sees the latest GlobalDairyTrade auction, with signs prices are struggling amid increased volumes of product on offer.

Reserve Bank governor Graeme Wheeler is also expected to keep interest rates unchanged this week, with the release of the monetary policy statement on Thursday, although he may revise the track of the official cash rate, which projected no changes from the current level of 1.75% over the forecast horizon in the November MPS.

The kiwi rose to 95.54Ac from 95.48Ac cents late yesterday. It was little changed at 58.65 British pence. The kiwi traded at 58.65 British pence and traded at 5.0174 yuan from 5.0196 yuan. It fell to ¥81.71 from ¥82.30. 

The trade-weighted index was at 79.44 from 79.38 late yesterday.

(BusinessDesk)