Currency talk: NZ dollar continues to rally
Jason Walls and CMC's Sheldon Slabbert discuss the global currency market news on NBR Radio and on demand on MyNBR Radio.
Favourable economic data has helped the NZD rally against the greenback over the past week.
A fourth consecutive rise at the GlobalDairyTrade auction and some good results in the quarterly survey of business opinion (QSBO) has helped the NZD jump from just under 65c last week to more than 67c yesterday.
Added to the rally was some weak data emerging from the US.
The non-farm payrolls – a primary measure of employment in the US – revealed just 142,000 jobs were created in September, which was well below expectation.
This has led to market pricing of a December rate hike to be pulled back.
CMC Markers trader Sheldon Slabbert says it looks as though job creation in the US peaked in November last year.
“In the US, they have had a shrinking labour market,” he says.
He believes US GDP is going to be revised down and employment growth is stagnating.
“This is not the condition where you can raise interest rates in.”
The next important decision in terms of the kiwi/US cross rate comes later in the month when the Reserve Bank of New Zealand (RBNZ) makes its interest rate decision.
The RBNZ’s decision will take into account Friday’s consumer price index (CPI) figure, which many analysts are picking will show subdued levels of inflation.
Mr Slabbert says although CPI is a tricky number to forecast, the lower kiwi dollar will filter through but there could be a surprise “to the upside.”
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NBR Radio
Tue, 13 Oct 2015
Tue, 13 Oct 2015
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Currency talk: NZ dollar continues to rally
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