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NZ dollar gains after mixed US jobs data

NZ Newswire logoNZ Newswire 4/12/2016 Jonathan Underhill

The New Zealand dollar rose after US non-farm payrolls painted a mixed picture of the US labour market, with slightly fewer jobs created last month but with the unemployment rate falling to a nine-year low.

The kiwi dollar traded at 71.18 US cents as at 8am in Wellington, from 71.40 cents in New York on Friday and from 70.96 cents in Asia at the end of last week. The trade-weighted index rose to 78.30 from 78 in Wellington on Friday.

The US economy added 178,000 jobs last month, just shy of the 180,000 jobs forecast in a Reuters survey, while the American jobless rate fell to 4.6 per cent, the lowest level since 2007.

Average hourly earnings declined 0.1 per cent in November against expectations of a 0.2 per cent gain.

The report cemented already-strong bets that the Federal Reserve will raise its key interest rate next week.

Expectations that US President-elect Donald Trump will boost government spending, and therefore corporate profits, have bolstered equities as well as yields on US Treasuries since his November 8 election victory, although Treasury yields and the US dollar index fell at the end of last week.

"After the strong post-Trump rally it's clear that a bit more two-way flow has returned to the USD and we expect it to show further signs of consolidation into year-end, before the upward trend returns," said BNZ's Jason Wong.

The outcomes of Italy's referendum and Austrian presidential elections will help determine the mood at the start of a week during which the European Central Bank is expected to extend its asset purchase programme. The kiwi dollar rose to 66.98 euro cents from 66.88 cents in New York and from 66.37 cents in Wellington on Friday.

The latest GlobalDairyTrade auction this week is expected to show further gains in New Zealand's key export commodity of whole milk powder.

The kiwi traded at 95.57 Australian cents from 95.76 cents on Friday, it was at 4.9007 yuan from 4.9124 yuan, it was down to 80.82 yen from 81.04 yen and fell to 56 British pence from 56.11 pence.

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