NZ dollar stumbles ahead of US employment data   7 Nov 2013

Article - BusinessDesk

NZ dollar stumbles ahead of US employment data

By Paul McBeth

Nov. 7 (BusinessDesk) - The New Zealand dollar fell from its two-week high ahead of US employment figures on Friday, which are seen as a bellwether on the pace of recovery in the world’s biggest economy.

The kiwi fell to 83.54 US cents at 5pm in Wellington from as high as 84.14 cents overnight, and was down from 83.77 cents at 8am and 83.81 cents yesterday. The trade-weighted index declined to 77.62 from 77.83 yesterday.

Traders are preparing for the Friday release of US non-farm payrolls in Washington, which are expected to show the world’s biggest economy added 120,000 jobs last month. The Federal Reserve wants to see a lower unemployment rate before it starts winding back its US$85 billion monthly asset purchase programme.

“The market’s getting back into the ‘will they taper won’t they taper?’ state,” said Imre Speizer, market strategist at Westpac Banking Corp in Auckland. “It’s going to be hard for the kiwi to break through the 84-ish number.”

Speizer said he expects the local currency will trade between 83.50 US cents and 84 cents leading up to the release, with New Zealand’s improving economy underpinning the kiwi. Government figures yesterday showed stronger than expected jobs growth in the third quarter.

“On the day and tomorrow, the kiwi looks alright,” he said.

The kiwi traded at 88.16 Australian cents at 5pm in Wellington from 88.12 cents yesterday after figures today showed weaker employment than expected across the Tasman.

Investors will be looking to see the outcome of monetary policy reviews in England and Europe, after the European Central Bank cut its economic growth forecasts earlier this week. The kiwi fell to 61.78 euro cents at 5pm in Wellington from 62.03 cents yesterday, and slipped to 51.95 British pence from 52.09 pence.

The local currency declined to 82.35 yen from 82.71 yen yesterday.

(BusinessDesk)

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