The New Zealand dollar weakened after a key measure of US employment posted stronger-than-forecast gains, reinforcing expectations the Federal Reserve will continue to taper its stimulus programme and boosting the greenback.
The kiwi weakened to 84.38 US cents from 84.61 cents at the New York close and 84.78 cents at 5pm on Friday. The trade-weighted index slipped to 79.01 from 79.29 on Friday.
The US dollar index, which measures the greenback against a basket of currencies, advanced after a report Friday showed US employers added 175,000 payrolls in February, above the 149,000 expected even in the face of harsh winter weather. That cemented expectations the Fed will continue to pull back its bond-buying stimulus programme by about US$10 billion a month. A reduction in the programme underpins the greenback as it reduces the amount of currency in circulation.
"The New Zealand dollar declined along with most of its peers after the release of the US payrolls report on Friday night," Kymberly Martin, markets strategist at Bank of New Zealand, said in a note. "The delivery of a better-than-expected reported boosted the US against most of its peers, the New Zealand dollar being no exception."
Also weighing on the kiwi, data out over the weekend showed a sharp decline in Chinese February exports, down 18.1 per cent compared with an expected gain of 7.5 per cent. That is likely to weigh on the Australian dollar today, BNZ's Martin said.
