NZ dollar holds at week-high after US jobs stoke optimism

NZ dollar holds at week-high after US jobs stoke growth optimism

May 6 (BusinessDesk) – The New Zealand dollar held at a week-high against the greenback after figures showed the US added more jobs in April and in previous months, helping lift stocks on Wall Street, commodity prices and growth-linked currencies such as the kiwi.

The New Zealand dollar traded at 85.30 US cents, from 85.32 cents in late New York trading on Friday and from 85.22 cents in Wellington at the end of last week. The trade-weighted index was unchanged at 78.64, also near a week-high.

Friday's US payrolls report not only surpassed expectations about the number of jobs created in April, it also showed upward revisions to the previous two months to the tune of 114,000 extra workers that went a long way to easing concerns about recent signs of a slowdown in the pace of the recovery. The S&P 500 ended the week at a record 1614.42 and the Thomson Reuters/Jefferies CRB Commodity Index gained 1.2 percent.

The jobs data “hasn’t completely obliterated concerns about a slowing US economy but it certainly went some way,” said Alex Sinton, senior dealer at ANZ New Zealand. Gains in commodities also helped lift the kiwi and Australian dollar, with gains exaggerated in metals such as copper, where some traders were “massively short.”

The kiwi may trade in a range of 85.10 US cents to 85.70 cents today, he said.

The local currency traded at 82.66 Australian cents from 82.64 cents in New York on Friday, having risen above 83 cents for the first time since 2009 last week.

Sinton said traders are looking ahead to the Reserve Bank of Australia’s review of interest rates tomorrow. While ANZ sees no change in interest rates, Sinton is expecting at least one cut this year and will be watching for any hints in the RBA’s language tomorrow.

The kiwi traded at 65.03 euro cents from 65.05 cents and was at 54.77 British pence from 54.78 pence. It edged up to 84.55 yen from 84.48 yen on Friday.

(BusinessDesk)

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