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NZ dollar climbs to week highs as Australian dollar soars

Fuseworks Media
Fuseworks Media

Wellington, July 8 NZPA - The New Zealand dollar burst out of recent ranges today after the United States sharemarket logged its best one-day gain in more than a month and the strength of the Australian labour market again beat economists' expectations.

The NZ dollar rose to its highest level in more than a week around US71c after a bullish forecast from financial company State Street Corp fuelled optimism about the coming US earnings season. European shares reversed early losses and Asian markets followed through with strong performances.

By 5pm the NZ dollar was at US70.45c, up from US69.18c at 5pm yesterday.

The Australian dollar soared to US87.16c at 5pm from US84.74c at the same time yesterday after Australia's jobless rate fell to its lowest point in more than a year as total employment surged in June.

Australia's unemployment rate was a seasonally adjusted 5.1 percent in June, compared to a market expectation of 5.2 percent and total employment rose by 45,900, easily beating the market expectation of a 15,000 rise.

Economists said the better than expected news could push the Reserve Bank of Australia to lift the cash rate in August.

"It's a very strong result," RBC Capital Markets economist Su-Lin Ong said.

The NZ dollar fell to A80.75c from A81.60c yesterday.

A dealer said the NZ dollar had been range-bound for most of this week but that changed today. The last time Australia reported strong data the positive impact lasted for several days and a good night was expected on the US equity market.

The euro rose to a two-month high as investors became more comfortable with risk.

The NZ dollar performed well against the strong euro to be 0.5565 euro at 5pm from 0.5493 at the same time yesterday. It surged against the yen to 62.20 yen at 5pm from 60.45 yen at the same time yesterday.

The trade weighted index rose to 66.91 at 5pm from 66.09 yesterday.

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