NZ dollar falls to new 2-mth low as US jobs report stokes Fed hike expectations
The kiwi is falling based on rising US interest rates.
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The New Zealand dollar dropped to a new two-month low after a stronger than expected US jobs report stoked expectations for the Federal Reserve to raise interest rates as early as this month.
The kiwi fell to 69.06USc as at 8am from 69.63USc yesterday. The trade-weighted index declined to 75.88 from 76.18 yesterday.
Yields on US 10-year Treasuries rose 4 basis points to 2.55% and the US dollar index was up 0.3% after the ADP employment report beat expectations with a larger increase in private payrolls last month. The figures are seen as a precursor to the official non-farm payrolls report on Friday, and boosted expectations the US central bank will go ahead with raising interest rates this month as growth in the world's largest economy remains robust.
"The US dollar was boosted after ADP private sector employment data rose by much more than expected, setting the scene for a bumper payrolls figure on Friday night," Bank of New Zealand currency strategist Jason Wong said in a note. "It all but seals a Fed hike next week."
BNZ's Wong says the kiwi was already on the backfoot after milk powder prices fell more than predicted at this week's GlobalDairyTrade auction and local data, including yesterday's manufacturing survey, indicated slowing economic growth.
"At a time when the US economic surprise indicator is galloping ahead, NZ's version is heading south," Wong says. "That combo, as well as weaker dairy pricing, have been a factor in the NZD's recent underperformance, not only against the USD but also on the crosses."
The local currency traded at 91.65 Ac from 91.59Ac yesterday and fell to 4.7716 Chinese yuan from 4.8041 yuan. It declined to 56.78 British pence from 57.02 pence yesterday and fell to 65.46 euro cents from 65.89 cents. The kiwi traded at 79.02 yen from 79.15 yen yesterday.
(BusinessDesk)
Paul McBeth
Thu, 09 Mar 2017
Thu, 09 Mar 2017
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NZ dollar falls to new 2-mth low as US jobs report stokes Fed hike expectations
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