NZ dollar falls after US jobs data disappoints

Photo / NZ Herald

The New Zealand dollar fell after weaker-than-expected US private sector jobs figures sapped investors' appetite for higher-yielding, or riskier, assets ahead of local employment data that may show the jobless rate held unchanged in the first quarter.

The kiwi fell to 81.06 US cents at 8.30am from 81.44 cents yesterday. The trade-weighted index declined to 72.10 from 72.35.

Traders were jumpy after US ADP private payrolls rose 119,000, short of the 170,000 expected, ahead of the major non-farm payrolls figures on Friday. That came after Euro-zone unemployment rose to a 15-year high 10.9 per cent, which sapped investors' appetite for bigger returns.

New Zealand's first-quarter household labour force survey, out today, is expected to the jobless rate was unchanged at 6.3 per cent, according to Reuters survey.

"A lot of people still expect non-farm payrolls to come in at 175,000 (extra jobs last month) - they're not revising their figures even after the ADP number," said Stuart Ive, currency strategist at HiFX in Auckland. "Currencies here are slightly weaker and at the lower end of the current range."

Ive expects the kiwi will trade between 80.80 US cents and 81.50 cents in the local session today, with the local employment figures the biggest risk event. Trading in Asian markets will be thin in the afternoon, with Japanese markets closed for the next two days for bank holidays.

The European Central Bank meets on Thursday in Barcelona, and investors will be looking for any commentary on stimulating the Euro-zone region's as fiscal austerity measures start to bite on the members' economies.

The threat of another sovereign debt crisis reared its head last month when Spanish bond yields spiked up after the Mediterranean nation struggled to meet budget cuts. Rating agency Standard & Poor's yesterday said the Euro-zone risks are still a threat to the Asia Pacific banking sector, which has been supporting the world economy since the global financial crisis in 2008.

The kiwi fell to 78.31 Australian cents from 78.71 cents yesterday, and declined to 64.92 yen from 65.46 yen. It was little changed at 61.58 euro cents from 61.59 cents yesterday, and dropped to 50.01 pence from 50.16 pence.