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NZ Dollar Stronger Vs Greenback After US Job Figures

Contributor:
Fuseworks Media
Fuseworks Media

Wellington, Jan 11 NZPA - The New Zealand dollar strengthened against the greenback which fell after an unexpected drop in United States jobs.

The US dollar suffered its biggest loss against a basket of six currencies in a month and a half after data on Friday (local time) showed US employers cut 85,000 jobs last month. November payrolls, however, were revised to show the economy actually added 4000 jobs rather than losing 11,000 as previously reported.

By 8am today the kiwi was buying US73.72c from US73.11c at 5pm on Friday.

Mike Jones of BNZ Capital said the NZ dollar had made a strong start to 2010, with a combination of firming risk appetite and a generally weaker US dollar.

If risk appetite remained buoyant and optimism about 2010 continued, he expected a push higher by the kiwi in coming sessions towards the US74.50c to US75c range.

Against the European currency, the NZ dollar was little changed at 0.5110 euro by the local open compared to 5pm on Friday, while the kiwi also edged up to 68.25 yen.

The kiwi slipped against the Australian dollar to A79.62c at 8am today from A79.85c at 5pm on Friday, while the trade weighted index was up to 66.80 from 66.70.

Interest rate futures traders reduced expectations the Federal Reserve will raise benchmark US short term rates in the first half of the year. They are now pricing a 22 percent chance of a Fed hike by mid-2010, compared with 40 percent before the release of the jobs data.

In minutes of the Fed's December monetary policy meeting, some Fed officials said persistently high unemployment might make it desirable at some point to expand or extend asset purchases.

But some analysts said the jobs data does not minimise the fact that the US economy has shown improvement, and the US dollar's weakness may be short-lived.

NZPA

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