NZD remains above 66 US cents on mixed US data

By Rebecca Howard

June 6 (BusinessDesk) - The New Zealand dollar was slightly weaker after mixed US data overnight but remains above 66 US cents.

The kiwi was at 66.16 US cents at 7:55am in Wellington from 66.30 US cents at 5pm in Wellington. The trade-weighted index rose to 72.66 points from 72.71.

The kiwi gained on a weaker greenback after the latest ADP National Employment Report showed the private sector added 27,000 jobs in May, less than the 173,000 jobs expected by economists polled by The Wall Street Journal. However, the New Zealand dollar pared some of its gains when the US ISM non-manufacturing index increased to 56.9 from 55.5.

"The muted 27,000 increase in the ADP measure of private payroll employment in May is a concern as it mirrors the recent deterioration in some of the survey-based employment indices," Capital Economics said in a note. The data comes ahead of the official non-farm payroll figures due Friday in the US. Capital Economics is expecting a 190,000 gain but "clearly the balance of risks to that estimate lie on the downside."

It said the unexpected improvement in the Institute for Supply Management's non-manufacturing index was "more reassuring" as it left the index at a level usually consistent with annualised GDP growth of slightly more than 2 percent. However, "given the collapse in the regional Fed services surveys, which tend to lead the ISM index, we are not convinced that this improvement will last."

The kiwi remained firm against the Aussie, in particular after weaker-than-expected first quarter economic growth across the Tasman increased expectations the Reserve Bank of Australia will be gearing up for another rate cut after cutting rates to 1.25 percent earlier this week.

The New Zealand dollar was trading at 94.93 Australian cents from 94.74.

Looking ahead, markets will be watching for today's ANZ commodity prices index and Australian trade data.

The kiwi was at 52.11 British pence from 52.18, at 58.93 euro cents from 58.87, at 71.70 yen from 71.65 and at 4.5692 Chinese yuan from 4.5825.

(BusinessDesk)

ends

© Scoop Media