The New Zealand dollar fell after better-than-expected US employment figures fuelled optimism about the strength of recovery in the world's biggest economy, stoking demand for the greenback.
The kiwi traded at 77.65 US cents at 8am in Wellington from 77.62 cents at the close of trading in New York, down from 78.64 cents at the New Zealand close last week. The trade-weighted index dropped to 76.28 from 76.63 at 5pm in Wellington last Friday.
The US added 248,000 jobs in September, pushing the unemployment rate to a six-year low 5.9 percent, according to Labor Department figures. That beat market expectations for 215,000 jobs to be added in the month and a jobless rate of 6.1 percent, prompting a rally in US stocks and the greenback on growing anticipation the Federal Reserve will start hiking interest rates as the US economy gathers steam. Minutes to the Federal Reserve's September meeting and a slew of central bank speakers will be closely watched by the market this week.
"The US continues to create jobs faster than Fed officials expect, underpinning risks that the Fed may begin to raise interest rates before mid-2015," Westpac Banking Corp market strategist Imre Speizer said in a note. "Both the Australian and New Zealand dollars shed more than 1 US cent on the strong US data."
The kiwi dollar has come off a peak in July amid falling commodity prices for logs and dairy, two of New Zealand's biggest exports, and has been helped on its way by the Reserve Bank confirming it intervened in currency markets in August. Governor Graeme Wheeler has called the local currency unjustifiably and unsustainably high since July, with the kiwi falling more slowly than commodity prices.
