NZ dollar holds near 3-week high against Australian dollar as payrolls awaited
The New Zealand dollar held near a three-week high against the Australian dollar and remained elevated against the greenback as traders await US non-farm payrolls for further evidence of growth in the world's biggest economy.
The kiwi traded at 94.90 Australian cents, having touched a three-week high 95.08 cents, from 94.86 cents yesterday. The kiwi fell to 73.82 US cents from 74.05 cents.
The gap between policy at the central banks of Australia and New Zealand widened this week, when Australia's cut its cash rage a quarter point to 2.25 percent and locally, governor Graeme Wheeler underlined that a neutral stance in monetary policy didn't mean rates will go lower. While the cross rate has been driven by divergent policy, the health of the US economy has dominated currency markets. US companies added 231,000 workers last month, keeping the jobless rate at 5.6 percent, according to economist forecasts.
"The market is biding its time ahead of the payroll number and that's going to determine the direction of the US dollar," said Imre Speizer, strategist at Westpac Banking Corp.
Driving the kiwi against its Australian counterpart, " the two central banks are going on divergent directions - the RBA is cutting, with expectations to do more. The RBNZ, on the other hand, reminded the market it is not cutting."
Speizer said a secondary factor is that dairy prices "have started to bounce, while iron ore is continuing to fall," he said, referring to the trans-Tasman neighbours' significant commodity exports. He sees the kiwi trading in a range of 94.50 Australian cents to 95.50 cents in the next 24 hours and the local dollar trading between 73.50 US cents and 74.50 cents.
The New Zealand dollar traded at 4.6113 yuan from 4.6269 yuan yesterday. The kiwi fell to 48.52 British pence from 48.86 pence yesterday, weakened to 86.52 yen from 87.30 yen and rose to 64.94 euro cents from 64.59 cents. The trade-weighted index weakened to 76.42 from 76.57 yesterday.
