The New Zealand dollar declined after trading in a narrow range overnight as investors await the release of key US jobs data which was delayed by a partial government shutdown.
The kiwi traded in a 64 basis point range overnight, slipping to 84.55 US cents at 8am in Wellington from 84.88 cents at the 5pm market close yesterday. The trade-weighted index dropped to 77.92 from 78.18 yesterday.
This month's US political standoff delayed the release of the jobs data for September which the Federal Reserve uses as a gauge of how the world's largest economy is tracking. Strength in the data may prompt speculation that the Fed could start tapering its quantitative easing programme this year although traders may look through a strong result on the expectation the economy has been hurt by the shutdown.
The New Zealand dollar "like most of its peers seems rather stuck in limbo as it awaits the postponed release of US payrolls data tonight," Kymberly Martin, a strategist at Bank of New Zealand, said in a note. "Any softness in the data could see the New Zealand dollar benefit from US dollar weakness, as QE 'tapering' expectations are pushed back further."
The US jobs report will be released tonight New Zealand time after being delayed since October 4. Non-farm payrolls probably grew by 180,000 in September, showing the economy was gaining momentum before the shutdown, according to polls by Reuters and Bloomberg. The jobless rate probably held at a four-year low of 7.3 per cent.
