NZ dollar weakens following upbeat US jobs data

The New Zealand dollar weakened after an upbeat US employment report ahead of the local long weekend bolstered the US dollar.

The kiwi fell to 66.35USc at 8am in Wellington, from 66.91USc  at 5pm on Friday. The trade-weighted index declined to 72.31 from 72.65 on Friday. New Zealand markets were closed for the national Waitangi Day holiday yesterday.

The US dollar strengthened after the key non-farm payrolls report on Friday showed that although the monthly headline employment gain of 151,000 undershot official expectations, average hourly earnings rose at the fastest pace in a year, and the unemployment rate slid to an eight-year low. That allayed some concerns about the strength of the US economy and kept open the possibility of further US interest rate hikes.

"As always, when US labour market data is due, it set the tone in currency markets," Bank of New Zealand senior market strategist Kymberly Martin said in a note. "Although the headline payrolls number disappointed the official consensus, the unofficial 'whisper number' was probably lower going into the release. In addition, other aspects of the report on unemployment and hourly earnings beat expectation and prevented the market getting too carried away with writing-off future Fed action. Consequently, the US dollar gapped higher."

In New Zealand today, state-valuer Quotable Value publishes its monthly housing data for January. The report will be eyed for clues on whether the bubbling Auckland housing market is picking up again after slowing over the final three months of 2015.

Chinese markets are closed this week for the New Year holiday period and many other Asian centres were shut yesterday and will be again today. In Australia, a report on business confidence is due for release.

The New Zealand dollar advanced to 93.53Ac from 93.09Ac on Friday, and was little changed at  45.96 British pence from 45.92 pence. It fell to 59.27 euro cents from 59.74 cents, declined to ¥76.46 from ¥78.06, and dropped to 4.3585 yuan from 4.3950 yuan.

(BusinessDesk)