Kiwi dollar lower after weaker-than-expected jobs data
The New Zealand dollar fell on perceived weakness in Marchquarter jobs data, even though the unemployment rate of 4.2 per cent was bang on expectations.
The kiwi was trading at US66.50c down from US66.79c. The tradeweighted index dropped to 72.46 points from 72.77.
The market focused on the fall in the participation rate from 70.9 per cent to 70.4 per cent and the 0.2 per cent fall in employment in the quarter — the market had been expecting a 0.5 per cent increase.
“It was a pretty decent headline rate but, as often happens, the devil was in the detail,” says Mike Shirley, a dealer at Kiwibank.
Kiwibank’s economists say they don’t think the numbers will add much to the Reserve Bank’s deliberations ahead of next week’s monetary policy statement but they’re picking a 25 basis point cut in the official cash rate to 1.5 per cent.
Shirley says the market is now pricing in a 60 per cent chance of an OCR cut next week.
The New Zealand two-year swap rate sank to 1.6095 per cent from 1.6687 while the 10-year swap rate fell to 2.1650 per cent from 2.2250.
Unemployment is low but so is inflation — New Zealand’s inflation rate of 1.5 per cent is below the central bank’s 2 per cent target.
The New Zealand dollar was trading at 94.27 Australian cents from 94.68 cents, at 50.98 British pence from 51.21 pence, at 59.29 euro cents from 59.53 cents, at 74.13 Japanese yen from 74.38 yen, and at 4.4760 Chinese yuan from 4.4974 yuan.