Article – BusinessDesk
Oct. 22 (BusinessDesk) – The New Zealand dollar fell in local trading ahead of the release of US jobs data which was delayed by political jostling over the Federal budget as growth in the worlds biggest economy comes back into focus.
NZ dollar falls ahead of US jobs as American economy comes back into focus
By Paul McBeth
Oct. 22 (BusinessDesk) – The New Zealand dollar fell in local trading ahead of the release of US jobs data which was delayed by political jostling over the Federal budget as growth in the world’s biggest economy comes back into focus.
The kiwi fell to 84.42 US cents at 5pm in Wellington from 84.55 cents at 8am and 84.88 cents yesterday. The trade-weighted index declined to 77.86 from 78.18 yesterday.
Investors have renewed their focus on the US economy after legislators last week cut a deal approving the Federal budget and lifting the debt ceiling until early next year. The US probably added 180,000 jobs and the unemployment rate held at 7.3 percent last month, according to a Bloomberg survey of economists. At stake is whether the partial government shutdown slowed growth so much as to push out the Federal Reserve’s planned tapering of its US$85 billion a month asset purchase programme.
“The chatter that people have been focusing on is what if get a number (of jobs added) that’s 200 (thousand)-plus,” said Chris Tennent Brown, FX economist at Commonwealth Bank of Australia in Sydney. “Given how much the US dollar has come down, maybe people are starting to think it’s a little overdone if we get data showing the US economy is actually going okay.”
The Dollar Index, a measure of the greenback against a basket of currencies rose to 79.79 at 5pm in Wellington from 79.69 yesterday. The greenback dropped as much as 3.6 percent from early September when the Fed delayed tapering its asset purchase programme, and during the US political impasse over the budget and debt ceiling.
CBA’s Tennent-Brown said the kiwi didn’t have enough evidence supporting a push above 85 US cents, and that today’s decline wasn’t surprising.
Australian data tomorrow is expected to show an annual pace of inflation of 1.8 percent in the third quarter, below the Reserve Bank of Australia’s target band of 2 and 3 percent, and slowing from a pace of 2.4 percent in the June quarter. The New Zealand dollar fell to 87.50 Australian cents from 87.83 cents yesterday.
The kiwi slipped to 83.02 yen from 83.13 yen yesterday and dropped to 61.78 euro cents from 62.07 cents. It declined to 52.36 British pence from 52.52 pence yesterday.