NZ dollar rises after US jobs report lags expectations

File photo / NZ Herald

The New Zealand dollar rose after a key US employment report failed to meet expectations, weighing on the greenback.

The kiwi jumped to 77.72 US cents at 8am in Wellington, from 77.51 cents at the New York close and 76.66 cents at 5pm in Wellington on Friday. The trade-weighted index advanced to 76.96 from 76.32 on Friday.

A report late last week showed US employers added 214,000 non-farm payrolls in October, only slightly below economist expectations of around 235,000 but significantly lagging the 300,000 expectation of some traders. The US dollar had advanced ahead of the data and some investors may have sold the currency for a profit following the report, traders said.

"The US payrolls missed slightly but I would have to say that they are still creating over 200,000 jobs a month, I still think that they are doing OK and despite the US dollar being a little bit weaker post those numbers, the overall trend for the US dollar going forward is probably still going to be higher," said Kevin Morgan, senior dealer, foreign exchange & derivatives at OMF. "The US dollar had a very strong week last week. People on that number would have taken some profits."

OMF's Morgan said investors should consider selling kiwi around these levels and the local currency is expected to continue to weaken as an improving US economy pushes up interest rates there.

"I would expect to see US dollar strength resume this week," he said.

This week in New Zealand, traders will be eyeing the latest monthly sales figures from the Real Estate Institute, due any day. The Reserve Bank's latest Financial Stability Report is scheduled for publication on Wednesday, while on Thursday there is the BNZ-Business NZ Performance of Manufacturing Index, the latest statistics data on food prices and the ANZ-Roy Morgan Consumer Confidence survey.

Today, the focus will be on Chinese data on inflation and producer prices. Chinese trade data at the weekend beat expectations, with a higher-than-expected trade surplus as exports gained more than anticipated and imports lagged forecasts. China is New Zealand's largest trading partner.

The New Zealand dollar rose to 89.76 Australian cents from 89.57 cents on Friday, gained to 62.30 euro cents from 61.92 cents, advanced to 48.88 British pence from 48.43 pence and increased to 88.99 yen from 88.37 yen.