The kiwi rose to 86 US cents over the weekend after U.S. labor reported indicated fewer jobs were created than expected, pushing investors towards higher-yielding currencies.
The New Zealand dollar hit a high of 86.03 US cents and was trading at 85.81 cents at the opening of Monday’s trade in Wellington, from 85.97 cents at close in New York, and 85.59 cents as of 5 p.m. on Friday in Wellington.
The US dollar index, which tracks the currency against a basket of major currencies, plunged after 192,000 jobs were created in March, against the economists’ prediction of 200,000. The index rose to 80.22 from 80.14 at the close of trade in Friday, according to the New Zealand Herald.
The U.S. unemployment rate remained stuck at 6.7 percent, missing forecasts of a decline to 6.6 percent.
“The longer it takes for US data to recover and the longer US bond yields remain depressed, the more incentive there is for international investors to park cash here in New Zealand, with AAA rated five-year Kauri bonds trading at yields close to 5 percent, which is pretty good considering US five-year Treasury bonds trade at 1.7 percent,” said David Croy, the head of ANZ Bank markets research in New Zealand David Croy; and Sam Tuck, a senior foreign exchange strategist.
“The bottom line: more disappointing data in the US is just piling more pressure on the New Zealand dollar,” Tuck and Croy added.
The ANZ Bank forecasts the kiwi to hover between 85.50 US cents and 86.30 cents on Monday. The currency fell to 92.35 Australian cents, down from 92.63 cents on Friday’s close. However it rose to 51.77 British pence from 51.60 cents; and gained against the euro from 62.43 cents on Friday to 62.67 on Monday’s trade. It fell against the yen from 88.93 yen to 88.59 yen.
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