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NZ dollar edges up before RBA statement

NZ NewswireNZ Newswire 5/05/2016 Jonathan Underhill

NZ dollar edges up before RBA statement © SNPA / Pam Johnson NZ dollar edges up before RBA statement The New Zealand dollar rose ahead of the Reserve Bank of Australia's monetary policy statement on Friday, which will help explain this week's cash rate cut, and US non-farm payrolls for April, which may provide clues to the timing of Federal Reserve rate hikes.

The kiwi rose to 69.03 US cents as at 5pm in Wellington, from 68.85 cents on Wednesday. The local dollar gained to 92.04 Australian cents from 91.81 cents.

The RBA releases its monetary policy statement on Friday, fleshing out its reasoning for cutting the cash rate a quarter point to 1.75 per cent this week, and possibly providing clues to the scope for further easing.

The Australian dollar dropped after Tuesday's cut, dragging the kiwi with it, and could fall further if the MPS suggests a further cut. Meanwhile, the US probably added 200,002 jobs last month, data due on Friday in the US is expected to show.

"The kiwi has been calm and stable over the past 24 hours and part of that is because we've got big events tomorrow," said Imre Speizer, a currency strategist at Westpac.

Speizer said US jobs growth of about 200,000 would be further evidence that the US labour market is strong, although the real question for the Fed in terms of the timing of further rate hikes is the re-emergence of wage inflation, which to date has been soft.

Traders pushed the US dollar lower overnight after a worse-than-expected ADP national employment report showed US companies added 156,000 jobs in April, the smallest increase in three years. However, it came back in favour in the early hours of the morning, after data showing the US trade gap shrank to its smallest in 13 months in March and factory orders grew 1.1 per cent, more than analysts forecast.

The local currency was little changed at 60.08 euro cents from 59.93 cents on Wednesday. It rose to 73.93 yen from 73.77 yen and rose to 4.4870 yuan from 4.4737 yuan. The kiwi advanced to 47.54 British pence from 47.33 pence.

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