The New Zealand dollar declined as the greenback strengthened after a key measure of the US labour market printed better than expected, bolstering optimism that a US economic recovery will lead to higher interest rates this year.
The kiwi fell to 73.37 US cents at 8am in Wellington, from 73.57 cents at the New York close and 74.20 cents at 5pm in Wellington on Friday. The trade-weighted index slipped to 76.14 from 76.42 on Thursday, ahead of the Waitangi Day national holiday on Friday.
The US dollar index, which measures the greenback against a basket of currencies, advanced after US non-farm payrolls increased by 257,000 last month, ahead of the 234,000 gain expected in a Reuters poll of economists. The US had its largest three month increase in jobs since 1997 after data for the previous two months was revised higher, and wages also increased in January, stoking expectations a strengthening US economy will prompt the Federal Reserve to hike interest rates by mid-year.
"The unambiguously strong non-farm payrolls report drove a broad-based strengthening in the US dollar," ANZ Bank New Zealand senior economist Mark Smith said in a note. "While there is still some way to go the data supports the view that labour market conditions are converging towards the Fed's full employment mandate and on its current trajectory will encourage the Fed to start rate hikes from mid-2015."
The kiwi is likely to trade between 73 US cents and 74.50 cents today, ANZ said.
