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NZ dollar gains vs Aussie counterpart

NZ Newswire logoNZ Newswire 20/10/2016 Jonathan Underhill

NZ dollar gains vs Aussie counterpart © Hannah Peters/Getty Images NZ dollar gains vs Aussie counterpart The New Zealand dollar rose against its Australian counterpart after figures showed continued weakness in the jobs market across the Tasman, raising concerns about the relative performance of that economy.

The kiwi rose to 94.34 Australian cents at around 5pm in Wellington, the highest since Oct. 10, from 94.02 cents on Wednesday.

The currency rose to 72.40 US cents from 72.12 cents.

The Australian economy shed 9,800 jobs in September from August, following a 9,000 drop the previous month.

The unemployment rate unexpectedly fell to 5.6 per cent, although that largely reflected a decline in the participation rate.

While traders expect the Reserve Bank of Australia is done cutting rates for now, a cut is still seen as a risk.

By contrast, a rate cut by the New Zealand central bank next month is largely priced into the currency, traders said.

"We think the RBA is done for now but with the risk that they have to do some more," said Philip Borkin, senior economist at ANZ Bank New Zealand. "The data today just adds to that risk."

He said the kiwi is "range-bound but still at an elevated level" and it will take a change in perceptions of either the Federal Reserve or RBNZ policy to move the currency much.

The kiwi continued its ascent this week after stronger-than-expected inflation figures and the release overnight of the Fed's Beige Book regional survey that economic activity in the US "continued to expand during the reporting period from late August to early October," and outlooks in most districts were "positive".

The trade-weighted index edged up to 77.58 from 77.29.

The kiwi dollar edged up to 58.90 British pence from 58.71 pence. It rose to 65.96 euro cents from 65.66 cents and was little changed at 74.96 yen from 74.87 yen.

The kiwi rose to 4.8773 yuan from 4.8615 yuan.

New Zealand's two-year swap rate fell 3 basis point to 2.05 per cent and 10-year swaps rose 1 basis point to 2.71 per cent.

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