Kiwi slips on strong US wage figures

  • 09/01/2017
(File)
(File)

The New Zealand dollar has fallen from a three-week high as demand for the greenback rallied after figures showed US wages rose at their fastest pace in seven years.

The kiwi traded at US69.60 cents as at 8am on Monday in Wellington from US69.58c on Friday in New York, down from US70.14c at the close of New Zealand trading last week. The trade-weighted index declined to 77.34 from 77.61.

US non-farm payrolls showed the US added 156,000 jobs last month, fewer than expected, though average wages rose 2.9 percent, the fastest pace in seven years.

The inflationary effect of higher wages added to the theme of an aggressive round of rate hikes by the Federal Reserve this year, and investors will be closely watching central bankers speaking this week, including Federal Reserve chairwoman Janet Yellen.

"As the market factored in the prospect of more prompt Fed rate hikes, the USD strengthened," said BBNZ market strategist Kymberly Martin.

"The NZD/USD has rebounded a bit from its late-December lows. However, on Friday night, like most of its peers, it succumbed to post-payrolls, USD strength."

The greenback spent much of last week in the doldrums as investors questioned the impact of US president-elect Donald Trump's spending programme, while at the same time the People's Bank of China took steps to limit capital leaving the world's most populous nation, causing the yuan to appreciate.

On Monday morning, the kiwi fell to 4.8146 Chinese yuan as at 8am from 4.8453 yuan last week.

It rose to 81.44 yen from 81.20 yen and declined to 95.37 Australian cents from A95.62c. It increased to 56.85 British pence from 56.59p last week, and slipped to 66.07 euro cents from 66.24c.

NZN

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