Kiwi up as jobless rate drops
By Paul McBeth
The New Zealand dollar has gained against its Australian counterpart as data indicated a stronger labour market and after Reserve Bank governor Graeme Wheeler talked down the chances of another interest rate cut.
The kiwi rose to 93.04 Australian cents at 5pm in Wellington from A92.14c yesterday It also advanced to US65.37c from US64.89c at 8am and US65.24c yesterday.
Government data today showed New Zealand's unemployment rate unexpectedly fell to near a seven-year low 5.3 percent, followed closely by Mr Wheeler's first public speech repudiating the need for a knee-jerk reaction to the recent slump in international oil prices.
The strong labour data and Wheeler's comments were seen as reducing the chance of a rate cut in New Zealand, a day after the Reserve Bank of Australia's policy review indicating an allowance for further reductions.
"Wheeler's looking more stick and the RBA's looking less sticky," said Imre Speizer, senior market strategist at Westpac Banking Corp in Auckland. "The kiwi looks like it's going to be one of the out-performers."
The employment data and RBNZ speech offset earlier pessimism from the latest GlobalDairyTrade event, which showed whole milk powder prices dropped 10.4 percent, more than expected.
New Zealand's two-year swap rate was unchanged at 2.6 percent at 5pm in Wellington and 10-year swaps dropped nine basis points to 3.3 percent, following the rally in bonds around the world.
The kiwi gained to 4.2996 Chinese yuan from 4.219 yuan on Tuesday, fell to 78.23 yen from 78.74 cents and was little changed at 59.88 euro cents from 59.83c. It edged up to 45.37 British pence from 45.25p.
The trade-weighted index rose to 71.97 from 71.62.