NZ dollar falls against Aussie

The New Zealand dollar fell sharply against the Australian dollar today on news that the strong Australian jobs market again exceeded expectations, making a rate rise there more likely.

The NZ dollar fell to A76.50c from A77.20c before the data was released and was at A76.60c at 5pm. It was at A77.04c at 8am and at A77.00c at 5pm yesterday.

The Australian dollar rocketed to a 26-year high on news that the Australian economy added 49,500 new jobs in September. Demand for labour has been consistent with 360,000 new jobs added in the past 12 months.

Jobs growth has been fastest in the booming mining sector where employment grew 20 per cent in the year to August. They also tend to be well paid jobs, boosting household incomes across the economy.

The Australian dollar rallied from US97.57c to be US98.37c at 5pm. The market expectation of rate hike by the Reserve Bank of Australia on Melbourne Cup day jumped to 68 per cent from 40 per cent, TD Securities said. The RBA surprisingly held its cash rate at 4.5 per cent on Tuesday.

"It was another blockbuster gain in Australian jobs and the main implication for the kiwi was a much lower cross rate against the aussie dollar," said Mike Jones, strategist at BNZ.

"Some of our traders fell off their chairs after that number. The aussie economy defies all expectations of a slowing," Mr Jones said.

The NZ dollar drifted lower against the greenback today after it powered above US75c for the first time in nearly 11 months, as weak data in the United States supported expectations of further easing by the US Federal Reserve.

It was at US75.39c at 5pm from US75.27c at 8am, having peaked around 5am near US75.50c -- after climbing from US74.81c at 5pm yesterday.

Weakness in the US dollar has been a theme but investors may tread water ahead of US payrolls data later this week.

The NZ dollar was at 62.49 yen at 5pm from 62.42 yen at 8am and 62.22 at 5pm yesterday. It was at 0.5416 euro at 5pm from 0.5401 euro yesterday.

The trade weighted index rose to 67.11 from 66.90 at 5pm yesterday.

- NZPA