You are using an older browser version. Please use a supported version for the best MSN experience.

NZ dollar jumps on US rate hike bets

NZ NewswireNZ Newswire 6/06/2016 Tina Morrison

The New Zealand dollar jumped to its highest in a month after weak US labour market data pushed out expectations for US interest rate hikes and damped demand for the greenback.

The kiwi touched 69.67 US cents on Monday when local markets were closed for the Queen's Birthday public holiday. The local currency was trading at 69.23 US cents at 8am in Wellington, from 68.28 cents on Friday. The trade-weighted index advanced to 73.90 from 73.62 on Friday.

The US dollar index, which measures the greenback against a basket of currencies, dropped sharply after US labour market data Friday showed employers in the world's largest economy added just 38,000 workers in May.

It was the lowest level since September 2010 and below the 164,000 expected by economists in a Reuters survey. That's prompted traders to scale back their bets for imminent US interest rate hikes.

Federal Reserve chair Janet Yellen acknowledged in a speech on Monday that the jobs report was "disappointing", however she said "further gradual increases in the federal funds rate are likely to be appropriate".

"The US employment report was a shocker, with non-farm payrolls of 38k for May significantly undershooting market expectations and downward revisions to previous months," BNZ's Jason Wong said.

"That one number effectively ruled out the Fed hiking in June and seriously diminished the chances of a July hike as well."

The Fed is due to review interest rates next week while the Reserve Bank of Australia reviews its policy on Tuesday, with New Zealand's central bank reviewing its rates on Thursday.

In New Zealand, first-quarter wholesale trade data is published.

The New Zealand dollar gained to 47.87 British pence from 47.39 pence on Friday after latest polling results showed support for Britain leaving the European Union, ahead of a June 23 referendum.

The kiwi increased to 74.46 yen from 74.17 yen, rose to 4.5422 yuan from 4.4951 yuan, slipped to 93.98 Australian cents from 94.38 cents, and declined to 60.92 euro cents from 61.19 cents.

image beaconimage beaconimage beacon