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NZ Dollar Regains Ground On Aussie After Weak Aust Jobs Data

Fuseworks Media
Fuseworks Media

Wellington, June 12 NZPA - The New Zealand dollar made gains on the Australian dollar today after Australian employment data printed much worse than anticipated.

Employment in Australia fell sharply in May, snapping a 19-month growth spurt. Economists had expected 13,500 new jobs but instead there was a net loss of nearly 20,000 and that helped ease fear the Reserve Bank of Australia will hike rates.

Debt market prices rallied sharply after the data was issued and the Australian dollar fell to its lowest level since mid-May. The aussie closed on US93.97c, down from US94.70c ahead of the data.

The kiwi cross rate strengthened to A80.25c from A79.83c at 5pm yesterday.

Against the US dollar, the kiwi closed unchanged on US75.40c.

Food price data showed no abatement in inflation pressures, with the food price index up 1 percent in May and 6.8 percent for the year -- the highest rise in nearly seven years.

On the other side, the Business NZ performance of manufacturing index dropped 2.2 points from April to a seasonally adjusted 49.3 in May.

Business NZ chief executive Phil O'Reilly said the sub-50 result for May indicated the tough times manufacturers were facing.

ANZ Bank today said NZ dollar was in a waiting game as the market eagerly awaited tomorrow's release of April retail sales data.

Yesterday's strong first quarter terms of trade data was neutralised by weak export volumes and the May Real Estate Institute housing data that showed sales down 53 percent.

The trade weighted index edged up to 67.80 from 67.78 at 5pm yesterday.

The US dollar edged up against the euro with the US currency underpinned by the Federal Reserve's array of tough talk this week about containing inflation that has spurred expectations for higher interest rates.

Some analysts said that investors have likely gone too far in seeing the possibility of three Fed interest rate hikes this year, especially when the economy is already grappling with a sharp housing decline and record high oil prices.

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