Dollar gains against broadly weaker greenback after jobs report misses expectations
Kiwi rose to 64.59USc as at 8am in Wellington.
Kiwi rose to 64.59USc as at 8am in Wellington.
The New Zealand dollar rose against a broadly weaker greenback after soft US labour market data reduced expectations the Federal Reserve will rush to raise interest rates.
The kiwi rose to 64.59USc as at 8am in Wellington, from 64.36USc in late New York trading on Friday and from 63.90USc in Wellington at the end of last week. The trade-weighted index rose to 70.30 from 70.16 in New York and 69.73 in Wellington on Friday.
The US added 142,000 jobs last month, Labor Department figures showed, compared with expectations of over 200,000 jobs, while figures for August and July were revised down and the unemployment rate held unchanged at 5.1%. Employment is a key measure for the Fed, which aims to normalise monetary policy after cutting the federal funds rate to near zero in December 2008 in response to the global financial crisis. The Fed is preparing to raises rates as traders put 78% odds on the Reserve Bank of New Zealand cutting the official cash rate a quarter point to 2.5% on October 29.
The US jobs report "was disappointing in its headline and its detail," said Kymberly Martin, a strategist at Bank of New Zealand. "An October Fed hike now appears well off the cards, and even our core view of a hike in December appears shaky."
Ms Martin said the kiwi may break out of its trading range of the past six weeks by trading above 64.60USc and if the currency holds on to its gains, the next level of resistance would be at 65USc.
The local currency rallied through the latter half of last week as rising dairy prices helped bolster flagging business sentiment, and provided traders with more confidence about the resilience of New Zealand's economy.
The kiwi traded at 91.38Ac from 91.28 Ac in New York and from 90.98Ac in Wellington on Friday, ahead of the Reserve Bank of Australia's interest rate decision tomorrow, where the odds of a rate cut are seen at just 22%.
The kiwi edged up to 57.50 euro cents from 57.42 cents in New York on Friday and rose to 42.48 British pence from 42.43p. It rose to ¥77.50 from ¥77.21 and rose to 4.1040 yuan from 4.0919 yuan.
(BusinessDesk)