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Kiwi up as US misses job predictions

NZ Newswire logoNZ Newswire 5/06/2017 Jonathan Underhill

The New Zealand dollar has risen to its highest level in about three months after surprisingly weak US employment data on Friday sent the greenback lower.

The kiwi rose to US71.34 cents on Tuesday morning, and earlier touched US71.49c, from US71.18c late Monday. The trade-weighted index rose to 76.94 from 76.53 on Friday, before the three-day Queen's Birthday public holiday.

The US economy added 138,000 jobs in May, less than the 182,000 expected by economists, while little wage inflation was evident. Average hourly earnings rose 2.5 per cent in May from a year earlier, slightly less than the 2.6 per cent gain expected. Meanwhile, the US non-manufacturing ISM came in at 56.9 last month, missing expectations for 57.1. The US dollar index tumbled after the jobs data was released and has remained lower so far this week.

"Friday's disappointing US jobs report has seen broad-based USD weakness with the NZD consolidating close to 0.7150," traders at HiFX said in a note.

"The key domestic driver for the NZD this week is likely to be tonight's GDT auction while this afternoon's RBA rate statement should dictate direction for the NZD/AUD cross rate."

Dairy prices have recorded five straight gains in recent GlobalDairyTrade auctions, with whole milk powder gaining to the highest level since the Febuary 7 sale. No change is expected from the Reserve Bank of Australia when it reviews interest rates on Tuesday, with the cash rate expected to remain at 1.5 per cent.

On Tuesday morning, the kiwi slipped to 95.25 Australian cents from A95.37c late Monday. It rose to 63.37 euro cents from 63.19c and traded at 55.30 British pence from 55.31p. The kiwi rose to 78.83 yen from 78.70 yen and gained to 4.8539 yuan from 4.8422 yuan.

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